FAMILY BUSINESS & GOOD GOVERNANCE
Independent board members can quell family business disputes by reminding family directors to ‘wear the right hat’ in the boardroom.
By Barbara Spector
Chris Vernon, fourth-generation president and CEO of The Vernon Company in Newton, Iowa, has an immediate response if his siblings request a raise: “Write it up, present it to me, and then I’ll present it to the compensation committee for you.”
Vernon’s company, which manufactures and markets promotional materials, has a majority-independent board, with five outside directors and two family members (Vernon and his father, who is the chairman).
Independent directors serving on the compensation committee review and approve pay recommendations for family members and top officers at the company.
“Frankly, that’s one of the conflict reducers for me,” Vernon says.
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