The Benefits of Engaging Independent Directors
By April Hall
Installing professional governance in the family business helps take personal dynamics out of company decisions and strategic planning. Objective advice from independent board members can help prevent family disputes and ensure decisions are being made in the best interests of the business.
The majority-independent advisory board of Richmond Baking Co., based in Richmond, Ind., was honored as a Private Board of the Year in 2018. The awards, presented at the Private Company Governance Summit by Family Business, Directors & Boards and Private Company Director magazines, honor advisory and fiduciary boards for their high standards in governance and the success that governance has fostered.
Richmond Baking’s board guided the company through the unexpected passing of chairman Jim Quigg and led the company to becoming more efficient and profitable. Bill Quigg, Jim’s son, is the fourth-generation president of Richmond Baking, having taken over the business prior to his father’s death.
Todd Schurz, president and CEO of Schurz Communications, a fifth-generation family company based in Mishawaka, Ind., is the lead independent director on Herschend Enterprises’ fiduciary board. Herschend, based in Atlanta, is a third-generation family company that owns entertainment properties including Dollywood, The Harlem Globetrotters and Adventure Aquarium. Herschend has had an independent fiduciary board for decades and also has strong family governance in place.
We asked Quigg and Schurz, “How does having a board help with shareholder relations?”
Bill Quigg, president, Richmond Baking:
“The first thought that came to me was [that the board serves as] an intermediary. That quickly evolved into having an outsider perspective.
“Just providing a perspective that is not clouded by other potential conflicts, independent board members are helpful as it relates to family communication. I think it’s partially through communication and partially through [board members’] experience to deal with potential conflicts.”
Todd Schurz, lead independent director, Herschend Enterprises:
“I think there are responsibilities and duties revolving around governance accountability, transparency and offering sound advice and making sure that good processes are observed.
“In terms of the question, ‘What does a board offer shareholders?’ I think it gives you confidence, ensuring that the company is well-run.
“From what I’ve seen with Herschend, it’s a really talented, smart board. Conversations are engaging. I think this combination of management, family and independent directors gives shareholders confidence and comfort that their company is being well looked after.”