Why should you invite external members to join your board of directors?
Have you ever wondered why you should have and how you can select external board members? Here is Håkan Cöster’s take on it. Håkan is the senior partner of Lense & Lumen’s Swedish member firm Högström & Co Management AB
Why should I elect external board members on our board when we have managed all these years? This is a common question many family- and/or privately-operated companies ask themselves.
According to regulations in most countries, all companies should have a board of directors. However, in several companies this only exists on paper. Instead it is common that the CEO is a member together with his/her family and that a real board work isn’t performed. This often due to a fear of bringing in external board members and by doing so also giving them insight into the company. However, most of these companies would in fact, perform better if they elected external board members and carried out proper board works. If a company for example, has plans for expansion they could benefit a lot from the knowledge and experience of external board members.
Is there a risk that there will be too much bureaucracy when you elect external board members?