In June of this year, Davis Wright Tremaine LLP hosted its fourth annual Farm to Label summit in Portland, Oregon.  One of the programs of the day was a panel mediated by DWT’s Drew Steen on the role of a non-family member executive in a family enterprise.

Appointing a non-family member executive can be the step that takes a family business to the next level, but it must be done with care.

It is a balance that requires full buy-in from the family as well as clear communication with the non-family member executive.  Those executives that thrive in this role tend to fall back on a few fundamental principles.

First, they educate the family on the important differences between ownership and management. A good non-family member executive will be the first to clarify that he or she does not own the business.  This “family first” attitude can go a long way towards alleviating any lingering concerns within the family.  But the executive also has to impress upon the family that ownership does not automatically make one suited to manage a business.

Second, they exercise patience with the family. Family dynamics are unique in each family, but it is fair to say that they are almost always personal dynamics, not business dynamics.  And a family enterprise brings with it the dynamic of the family, whether intentionally or not.  As an outsider, the non-family member executive must be patient with these internal politics.  One of the great assets of a non-family member executive, however, is their ability to lead without any family bias or taint.  At their best, a non-family member executive can be the universally respected voice when interpersonal differences create friction within the business.