Corporate0

The Role of Independent Directors (IDs) in Family business

The DNA of a family business is different from that of a normal corporate. A family business has a distinct promoter family, which not only participates in the running of the business, but also influences the culture of the company. The top management of such a company usually has family members, and the shareholding pattern is also skewed in favour of the family members, and their dependents. The patriarch of the family is usually the Chairperson of the Board. There are a number of persons in management roles who are personally loyal to the family, in addition to being loyal to the business. A number of decisions therefore are likely to be influenced by the thought process of senior members of the family. There could also be situations where the top management positions are passed on from one generation to another.