In June, we hosted our 14th annual Private Company Governance Summit, and this year’s conference reinforced why we started it nearly a decade and a half ago. The idea was simple: bring together private company chairs, CEOs, board members and owners to learn from one another’s experiences. Fourteen conferences later, that idea remains just as powerful, and just as necessary.
Today, it is the largest national event empowering private companies to build better boards. What I value most about the conference is how practical the conversations are. This year’s sessions covered everything from board composition and the board/CEO relationship to succession planning, executive compensation and AI in the boardroom. I came away with a long list of ideas and actionable takeaways that I could apply to the boards on which I serve.
One of the highlights for me was a fireside chat that I conducted with David Shaffer, executive chairman of Just Born, the 103-year-old family company behind Peeps, Mike & Ike, Hot Tamales and Goldenberg’s Peanut Chews. David is a very thoughtful leader, and his insights on board composition, succession and culture gave me plenty to think about.
But one comment in particular has stuck with me.
David described the lens through which the company and its owners make decisions: “We ask what will be best for the company for the next generation, not simply what’s best for us today.”
Private ownership can provide two related governance advantages: clarity of purpose and patience. Private company boards can understand not only that shareholders want value created, but what they ultimately want that value for, including liquidity, growth, legacy, community impact or opportunities for the next generation. And without the daily judgment of public markets, private companies often have greater freedom to pursue those objectives over a longer time horizon.
But being privately held doesn’t automatically make a company long-term oriented. Nor does it guarantee clarity about what owners want to accomplish. Boards have an important role in protecting both advantages.
That is particularly true today. Boards are confronting AI, tariffs, geopolitical uncertainty, cyber risks and a seemingly endless stream of other issues. All deserve attention. The danger is allowing whatever happened most recently to consume the board’s attention at the expense of what matters most over the long term.
The board agenda is one of the clearest indicators of whether long-term priorities are truly getting the attention they deserve. This summer, I went back and looked at the previous four agendas of the boards on which I serve and asked myself, “Could I tell from those agendas what the company’s three most important long-term priorities were?” Sometimes I could. Sometimes I couldn’t.
It’s a simple exercise worth trying, and then using to shape future agendas. If the company’s long-term priorities aren’t showing up consistently, the board should be more deliberate about making room for them. Protecting the private company advantage requires deliberately protecting time to focus on the future, including strategy assessment, succession planning, capital allocation and investments that may not pay off for years.
It’s not that public companies don’t focus on the long term. Of course they do. But private ownership can make it easier to invest during downturns, develop talent whose payoff won’t be apparent for years, enter markets that require patience and make capital investments that may depress near-term earnings but create significant long-term value. Moreover, private company boards often have more room to focus on assessing strategy because their agendas are less burdened by some of the compliance-related agenda items facing their public company peers.
Long-term orientation doesn’t mean ignoring short-term challenges. After all, the long term is made up of a series of short terms, each of which requires strong execution. Nor does it mean giving management an excuse for underperformance. A board can hold management accountable for today’s execution while supporting investments whose returns won’t show up in this year’s EBITDA.
Boards should give management the opportunity to be patient, but not complacent. Patience without accountability can become complacency. Accountability without patience can become short-termism.
But having a longer time horizon only matters if a company is willing to use it. At a recent board meeting, a fellow independent director asked a subtle but important question: “What decisions can our company make today that competitors with different ownership structures and time horizons might struggle to justify to their investors?”
It’s a question I think more private company boards should ask.
And independent directors are particularly well-positioned to do so. They can bring experience from other companies and ownership structures while applying that perspective through the lens of this company’s strategy, time horizon, and owners’ values and priorities, not simply importing the playbook from their last company.
David described the message Just Born gave its independent directors this way: “We didn’t recruit you to tell us what we already think. We recruited you because we genuinely want to know what you think.”
That’s an important balance. Independent directors should challenge management and owners, introduce new ideas and question long-held assumptions. But they should do so with an understanding of what makes the company and its ownership different.
I’ve written previously about the value of engaged owners in private companies, who often bring a deep understanding of, and close connection to, the business. That relationship gives them an opportunity many public company boards do not have, to understand the values and objectives of the shareholders. After all, a long-term perspective is more valuable when there is clarity about the reason for the long-term goals.
Boards, therefore, need to keep their shareholders’ priorities and values front and center. Shareholder objectives can easily become something discussed once a year and then set aside as the board turns its attention to immediate challenges. The best private company boards continually connect today’s decisions to what the owners ultimately want to accomplish. That clarity can be enormously powerful when paired with a long-term perspective.
Just Born is a good example. The company has a strategic plan to double its size by 2030, with a mantra David described simply: “Double the size of the business so we can double the good we do.”
That is clarity of purpose paired with a long-term perspective.
Private ownership can provide the freedom to think in decades and generations. Great boards make sure that freedom becomes a strategic advantage.