New Governance Institute launched by Family Business Center
“Effective governance is needed to hold leadership accountable for the strategy and management of family businesses," says Anne Smart, director of Loyola’s Family Business Center, "particularly as they go through developmental cycles as the business transitions from one generation to the next and grows in size and complexity.”
To support this, the Family Business Center recently launched the Governance Institute, a unique 18-month program to help family members develop the skills they need to be effective directors, to help participants to understand the work and processes of high performing boards, and to provide resources to strengthen participant’s governing boards of directors or advisors.
The first group of institute participants includes representatives of six middle-market family businesses from the Midwest.
Here, Smart discusses the institute and the importance of peer support and experiential learning in family business.
Tell me about the Governance Institute.
Over the course of 18 months, participants will complete 12 sessions led by Andrew Keyt, clinical professor of family business at the Quinlan School of Business. The institute has two overall learning objectives for participants—the acquisition of practical skills by family members resulting in effective contributions to their own and other family business boards, and a deep understanding of the functions of high-performing, effective boards.
These objectives are broken down into individual modules and provide a comprehensive understanding of family business governance. Topics include:
- Managing emotions
- Understanding the role of the board in a family business system
- Creating policies and procedures for key transitions in family businesses
- A basic understanding of business disciplines
Boards are the most effective when they’re able to teach, advise, and challenge leadership to make the best decisions that will benefit both the business and its shareholders.
How will the topics be taught?
Like all our institutes, we designed it so participants can take what they have learned, implement it, and at the next session discuss and share their experiences with one another. This cycle of knowledge, reflection, and action is a key characteristic of experiential learning in Family Business Center institutes, as well as in education at Jesuit institutions such as Loyola.
In class, live case studies or subject matter experts will illustrate each topic. The cases selected represent healthy and positive examples of board leadership for a family business. The subject matter experts will talk openly and honestly about their experiences to help build participants’ knowledge of the major competencies and principles in family business governance.
Why incorporate peer support and hands-on learning?
Peer support, in the context of family business, is extremely important because families who work in a business together are often very isolated. They don’t talk about the business with non-family members, and they don’t talk about the family for fear of harming either one. Essentially, they end up in this sort of closed loop of only knowing what they know.
Knowing this, the Governance Institute places participants in a peer setting so they can interact with and learn from one another. We want them to build strong relationships with their fellow classmates, while also learning in a trusting environment.
The hands-on activities during the sessions encourage participants to engage with one another and discuss past experiences to reflect on what could’ve been done differently to change the results.
We believe that this environment and approach will effectively prepare our participants to contribute to and lead highly effective boards—and in the process, help their family businesses grow.