The Role of Your Board of Directors in Succession Planning

Many family businesses rely on their boards of directors to help them during succession planning. Here, we share our top considerations as it relates to boards of directors and their involvement in the process.

Many family businesses rely on their boards of directors to help them during succession planning; boards should understand the family dynamics at play during this planning process so that they are aware of how to navigate complexities that emerge. Here, we share our top five considerations when involving the board in succession planning.

Help the Current Owners Think Through How They Extricate Themselves from Their Role

It is often difficult for the current owners of a family business to outline a path for stepping down from their current decision-making role(s) and transitioning into that of mentor and advisor to the next generation. While they may be focused on collaborating with the next generation on succession and outlining a plan for the next generation to take over the responsibilities of the family business, it can be harder for those in charge to plan for how they will actually remove themselves and step back from the day-to-day responsibilities of ownership. The board of directors can help current owners think through their future relationship with the family business and outline the extent to which they would like to be involved – as well as help in discussions with the next generation around the level of involvement they desire from the outgoing generation.

Hold the Current Generation Accountable for Developing the Next Generation

The current generation of ownership is responsible for developing the next generation to assume the responsibility of running the family business and to do so intentionally. The board of directors should not only hold the current generation accountable for developing this roadmap alongside the next generation, but also ensure there is progress made against the development plan. Setting benchmarks for progress and regular check-ins to ensure that the next generation is being groomed and prepared can help keep the current generation focused and ensure that the transition period does not drag on longer than necessary.

Act as a Sounding Board on How Next Generation Family Involvement in Management Will Look

One of the components of the succession planning process for the current and next generation of owners is determining the roles and responsibilities needed to be filled in order to achieve the next generation’s vision for the business – and outlining the process and requirements for determining whether or not family members will fill these positions. The board of directors can serve as an open-minded sounding board for the family as they work through these design plans, helping them determine rules of engagement for family members and consider the trade-offs. For example, while a family member may be committed to the family business, are they the most competent candidate, or is an outside candidate a better fit? The board can offer the family insight into some of these more difficult decisions and make sure that owners stay focused on making the decisions that deliver the best outcomes for them as owners as they navigate complex family dynamics that often emerge around this topic.

Encourage the Board to Engage with Next Generation Family Members as a Mentor and Guide

Keep in mind that board members are hired advisors. Family business owners should look to the board of directors to engage with next generation family members as a candid source of mentorship and guidance as the next generation strives to educate themselves on the business and become comfortable assuming ownership responsibilities. The board should be relied on to develop a relationship with the next generation and make future owners comfortable enough to seek advice. This also provides next generation owners with an objective group of individuals to go to for guidance on areas where they may be struggling to communicate effectively or reach an understanding with the current generation.

Give Permission to the Board to Hold You Responsible as a Leader

Those in the leader seats should also ask the board to hold them responsible for doing that which is in the best interest of the company and a successful transition process. Family business owners should foster an open and honest relationship with board members and ensure the creation of an environment in which directors feel comfortable correcting current owners so that all parties remain focused on making decisions that enable a successful ownership transition and the best outcomes for all owners.


The board of directors can help current and next generation owners as they navigate the succession planning process by acting as a mentor and guide. By keeping all parties focused on the end goal of a successful ownership transition, board members can play a critical role in ensuring the process runs smoothly and that the family maintains harmony. At Brown Brothers Harriman, we have helped hundreds of businesses navigate governance and succession issues, and we would be happy to work with you in these areas.

Not Everyone Needs a Board! But Maybe You Do

Many prominent private businesses that we work with do not have boards and have successfully transitioned their business over generations. In certain situations, it may make perfect sense for the family or an informal group of family and nonfamily members to make all of the decisions around succession planning. Again, the question of whether a business needs a board for succession planning comes back to the question of why it wants a board in the first place.

This timeline shows the progression of family businesses and their governance bodies. In the early stages, it may be fine to have no board and be in a situation where the founder makes every decision. However, over subsequent generations and as ownership becomes more dispersed, many founders and owner groups begin to see the value in convening a board. This is a normal evolution through which businesses reach a point where they require independent members and diversity of thought.

One final note: For families who decide it’s time for a board, it’s important to dispel the myth that bringing in a board means stripping leadership of its power. Remember that boards can be designed in whatever way the family and business want, and the board ultimately reports to the owners.

Up Next
Up Next

Does the Business Have to Stay in the Family? Steps to Take When Ownership Succession Isn’t an Option

The decision to pursue an outside exit strategy, as opposed to a traditional family ownership succession path, is a difficult one. We lay out several steps that owners who are grappling with this issue can take as they seek to determine the best strategy for themselves, the family and the business.

Brown Brothers Harriman & Co. (“BBH”) may be used as a generic term to reference the company as a whole and/or its various subsidiaries generally. This material and any products or services may be issued or provided in multiple jurisdictions by duly authorized and regulated subsidiaries. This material is for general information and reference purposes only. This material may not be reproduced, copied or transmitted, or any of the content disclosed to third parties, without the permission of BBH. All trademarks and service marks included are the property of BBH or their respective owners. © Brown Brothers Harriman & Co. 2022. All rights reserved. PB-05199-2022-03-23

As of June 15, 2022 Internet Explorer 11 is not supported by

Important Information for Non-U.S. Residents

You are required to read the following important information, which, in conjunction with the Terms and Conditions, governs your use of this website. Your use of this website and its contents constitute your acceptance of this information and those Terms and Conditions. If you do not agree with this information and the Terms and Conditions, you should immediately cease use of this website. The contents of this website have not been prepared for the benefit of investors outside of the United States. This website is not intended as a solicitation of the purchase or sale of any security or other financial instrument or any investment management services for any investor who resides in a jurisdiction other than the United States1. As a general matter, Brown Brothers Harriman & Co. and its subsidiaries (“BBH”) is not licensed or registered to solicit prospective investors and offer investment advisory services in jurisdictions outside of the United States. The information on this website is not intended to be distributed to, directed at or used by any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. Persons in respect of whom such prohibitions apply must not access the website.  Under certain circumstances, BBH may provide services to investors located outside of the United States in accordance with applicable law. The conditions under which such services may be provided will be analyzed on a case-by-case basis by BBH. BBH will only accept investors from such jurisdictions or countries where it has made a determination that such an arrangement or relationship is permissible under the laws of that jurisdiction or country. The existence of this website is not intended to be a substitute for the type of analysis described above and is not intended as a solicitation of or recommendation to any prospective investor, including those located outside of the United States. Certain BBH products or services may not be available in certain jurisdictions. By choosing to access this website from any location other than the United States, you accept full responsibility for compliance with all local laws. The website contains content that has been obtained from sources that BBH believes to be reliable as of the date presented; however, BBH cannot guarantee the accuracy of such content, assure its completeness, or warrant that such information will not be changed. The content contained herein is current as of the date of issuance and is subject to change without notice. The website’s content does not constitute investment advice and should not be used as the basis for any investment decision. There is no guarantee that any investment objectives, expectations, targets described in this website or the  performance or profitability of any investment will be achieved. You understand that investing in securities and other financial instruments involves risks that may affect the value of the securities and may result in losses, including the potential loss of the principal invested, and you assume and are able to bear all such risks.  In no event shall BBH or any other affiliated party be liable for any direct, incidental, special, consequential, indirect, lost profits, loss of business or data, or punitive damages arising out of your use of this website. By clicking accept, you confirm that you accept  to the above Important Information along with Terms and Conditions.

1BBH sponsors UCITS Funds registered in Luxembourg, in certain jurisdictions. For information on those funds, please see

captcha image

Type in the word seen on the picture

I am a current investor in another jurisdiction