Creating a Council of Advisors

"Experience is one thing you can't get for nothing." Oscar Wilde

Family-owned and other closely-held corporations often experience the need for independent, unbiased advice to guide the business through the ever changing business climate, as well as through personality and family differences that can harm and even destroy a business.

Traditionally, corporations have looked primarily to Boards of Directors to provide the expertise and counsel necessary to manage the business. Often Boards of private companies are supplemented with members who are neither shareholders nor officers of the corporation. However, in the context of family-owned and closely-held corporations, a Board of Directors has significant shortcomings even with the use of outside independent Directors. The stockholders may not feel comfortable granting legal management control of the business to an enlarged Board comprised in part of non-family members. Potential Directors are also reluctant to accept Board membership because of the potential liability to the shareholders, the corporation and third parties arising out of a Director's legal status as a fiduciary.

A developing alternative to the traditional board of directors is the use of a Council of Advisors which can provide an independent forum to address and discuss business policy and practices without many of the concerns attendant to the Board of Directors.