The CFA Institute Viewpoint is …”Company boards should have an independent majority. An independent majority on the board is more likely to consider the best interests of shareowners first. It also is likely to foster independent decision-making and to mitigate conflicts of interest that may arise.”
Deloitte say “…a growing number of privately-owned companies have opted to have boards with independent board members, believing that the perspectives and insights that they can bring to the company far outweigh any constraints. While some companies choose to include independent board members on their board of directors, most appoint them to a board of advisors.”
When you think about it makes perfect sense.
If your net worth is in excess of £1m, what independent oversight do you employ? Sadly, most individuals fail to employ independent oversight.
Don’t confuse oversight with employing an IFA. You can employ an IFA, but you still need oversight.
If you employ a wealth manager, you still need oversight.
According to Deloitte “Entrepreneurs are typically strong willed people, and for many the thought of having to answer to similarly strong willed independent board members about the decisions they make for their businesses is not particularly appealing. They may also believe the cost, time, and effort required for a board with independent members could be put to better use elsewhere in their businesses. Despite that, a growing number of privately-owned companies have opted to have boards with independent board members…”
If you are a successful individual, you feel your current direction is the right direction. Yet impartial oversight when it comes to financial decisions can prove to be invaluable.
Be curious, let’s have a conversation.