What benefits does a family business gain from working with an independent supervisory board member?

Independent non-executive directors (in the Polish context, typically members of supervisory boards) can play a significant role at every stage of a family business’s development. Their experience and broad business perspective are valuable both for scaling economic activity (including internationally) and for enhancing the quality of ownership oversight. Additionally, entrepreneurs particularly appreciate the presence of independent supervisory board members when seeking external financing or during periods of organizational transformation and succession challenges.

An independent supervisory board member builds the value of a family business

A family business—where most or all corporate rights are held by the founders or subsequent generations—develops over the years based on strategies and decisions made by a small group of owners. Sometimes, an external impulse is needed to overcome barriers that arise during organic growth.

Businesses built on family cooperation are unique. Each operates according to specific mechanisms that differ from those used by other entities in the same industry. However, these unique customs can sometimes become anchors or inefficient decision-making chains. Breaking these patterns cannot be done radically; it requires evolutionary actions tailored to the company’s unique characteristics.

An independent supervisory board member can support the business development and organizational evolution of a family company more effectively than an external, contract-based advisor. First, serving on a supervisory board is inherently a long-term role, allowing the member to understand the company and its specifics better than a consultant working on a short-term project. Second, with a true and accurate picture of the company, the independent board member can use their experience and knowledge to identify real growth obstacles and help find solutions. If external resources are needed at that stage, they will be contracted based on actual needs - not on a mistaken perception. This approach, focused on real rather than superficial problems, is more time- and cost-effective.

There is also a good chance that the challenges faced by the family business, have already been overcome in another organization with the involvement of such a board member. The market includes a group of experienced independent supervisory board members with established personal brands in business and the broader capital market, backed by years of practical experience. These are individuals who have solved real problems in their professional lives.

Engaging an independent supervisory board member brings new competencies to the company in the face of new challenges—whether operational, strategic, or in the area of so-called “soft skills.” For example, if a company is facing international expansion or digital transformation, it is worth appointing someone to the board who has already made such a leap in their career or at least observed it closely. In the case of a growth strategy based on acquisitions, a mergers and acquisitions expert will contribute significantly to discussions with management. It is valuable to have such individuals on board.

It is important to emphasize that, from a legal perspective, an independent supervisory board member does not manage the company’s affairs, so there is no risk of creating an internal power struggle. However, they can act as an advisor whenever their voice is worth hearing. The legal obligation for such a board member to act in the objective interest of the company and to maintain confidentiality supports open and effective communication.

An Independent Supervisory Board Member Increases the Credibility of a Family Business

A professional from outside the founding family, regardless of their technical expertise, brings an objective perspective to the company’s operations—one that is not distorted by emotional factors. Through long-term service in the company, they come to understand its organization and specific characteristics, enabling them to introduce best market practices in a way that complements, rather than disrupts, the company’s unique nature.

The presence of an independent supervisory board member within the organizational structure sends a clear signal to business partners and financial institutions that the company is professionalizing its management and taking steps toward organizational and governance transformation. This enhances the company’s credibility by providing assurance of objective oversight and appropriate internal control systems, which reduce stakeholder risk.

Ultimately, increasing the transparency of decision-making processes in a family business gradually prepares it to attract external financing, including equity investment. The professionalization of corporate governance facilitates and accelerates potential discussions with investors, should the founders or their successors consider even a partial sale of their shares.

An Independent Supervisory Board Member as a Pillar During Transformation or Succession

Every family business eventually reaches a point where the founders intend to hand over the reins to the next generation. Some succession models assume that the business will be run by another family member, while others involve bringing in an external manager. Regardless of the chosen path, an independent supervisory board member can help ensure the process is safe and effective.

If the successor is a family member and the founders retain the right to make or co-make strategic or critical decisions, the independent board member can take on the responsibility of ongoing oversight of the company’s operations. This external professional can serve as an objective sparring partner for the management team in addressing daily challenges. In such a setup, the founders are only involved in matters of significant importance.

An independent board member with years of experience in effective oversight of managers—while maintaining sound corporate governance—enhances the security of the family business owners, especially if succession involves external executives. It must be acknowledged that, in many family businesses, internal oversight during the founders’ tenure is often symbolic. Having a professional on the supervisory board who knows how and where to effectively monitor external managers increases the comfort level of the company’s beneficiaries when leadership is handed over to someone from outside the family.

Additionally, the independent board member can act as an impartial and thus effective mediator if the founders’ and successors’ visions for the company’s development diverge. Their only directive is the company’s best interest, free from emotional bias.

An independent supervisory board member who has learned the company’s core values directly from the founder’s vision can become a guardian and continuer of those principles—even after the founder’s death. In uncertain situations, they can remind others of the company’s heritage and the foundations of its position, emphasizing that proper identity and brand management are key to long-term success.

When Should I Consider Appointing an Independent Supervisory Board Member?

The benefits of involving an independent supervisory board member (non-executive director) suggest that this step should be seriously considered by family businesses facing new operational or developmental challenges. Overcoming problems or achieving goals will be faster and easier with the help of experts who have personally faced similar challenges or implemented comparable strategies in their careers.

Some benefits of working with an independent board member only become apparent over the long term and require time to deliver results. This is especially true for efforts aimed at professionalizing corporate governance to enhance internal security and external credibility, as well as succession processes. A complex business organization cannot be transformed overnight without causing disruptions, just as effective succession planning cannot be responsibly executed in such a short time. These processes inherently require preliminary analysis and medium- to long-term planning. Therefore, it is wise to begin early enough to ensure that the implementation phase delivers results within the expected or necessary timeframe.

Author: Karol Maciej Szymański

Why an Independent Supervisory Board Member Can Be an Added Value

The benefits of involving an independent supervisory board member (non-executive director) suggest that this step should be especially considered by family businesses facing new operational or developmental challenges. Effectively overcoming problems or achieving strategic goals becomes faster and easier with the support of experts who have personally dealt with similar difficulties or implemented comparable strategies in their professional careers.

What Competencies Does an Independent Board Member Bring?

Independent members often contribute not only industry knowledge but also strategic thinking skills and the ability to ask the right questions—questions that structure discussions and compel the management board to clearly define objectives. Their strength also lies in the fact that they are not entangled in ongoing family or historical relationships, allowing them to perform a more objective and transparent oversight and advisory role. A well-chosen independent board member can also serve as a mentor to the management team or the younger generation of owners.

When Is It Worth Appointing an Independent Member – Specific Situations

Appointing an independent supervisory board member is worth considering in situations such as:

• A planned change in the business model or entry into new markets
• Implementation of an extensive development or expansion strategy
• Preparation for intergenerational succession
• A desire to professionalize management and increase transparency
• Preparing to attract investors or go public
• Crisis situations requiring objective assessment and advice from outside the internal circle

Professionalizing Corporate Governance and Succession Takes Time

Some benefits of working with an independent board member only emerge in the context of a long-term relationship and require time to achieve the desired effect. This applies especially to efforts aimed at professionalizing corporate governance to enhance internal security and external credibility, as well as succession processes. It is not possible to radically change the functioning of a complex business organization overnight without causing disruptions - just as it is not feasible to responsibly prepare and implement an effective transfer of control to the next generation in such a short time.

These processes inherently require preliminary analysis and medium- to long-term planning. Therefore, it is advisable to start early enough so that the implementation phase delivers results within the expected or necessary timeframe.

Summary: Don’t Wait for a Crisis to Act

Appointing an independent supervisory board member does not have to be a reaction to a problem. It can be a proactive step toward securing the company’s future, improving decision-making quality, and building a competitive advantage. The earlier this decision is made - especially in the context of succession or capital-raising preparations - the greater the chance of fully leveraging the potential that an independent perspective brings.

Authors:
Karol Maciej Szymański
Katarzyna Kazior

On February 26, 2025, the European Commission presented the first draft Omnibus package aimed at reducing administrative burdens for businesses within the European Union. The proposed simplifications include amendments to the Corporate Sustainability Reporting Directive (CSRD).

High-quality corporate governance is the cornerstone of effective business operations and the sustained growth of enterprise value. Central to achieving this is the role of professional Supervisory Boards, which include independent members (independent Non-Executive Directors).

The expertise, knowledge, experience, and dedication of independent Non-Executive Directors play a critical role in upholding corporate governance standards. Their contributions enhance a company’s value, foster sustainable growth, and promote transparency in operations.

The Association of Independent Non-Executive Directors supports these professionals in their vital roles by:

• Promoting best practices,
• Facilitating a platform for the exchange of experiences, and
• Providing knowledge and tools to empower effective oversight, foster constructive discussions with management, and enable well-informed decision-making that benefits companies, their shareholders, and other stakeholders.

This document is designed specifically for independent Non-Executive Directors. It offers a comprehensive collection of best practices and serves as a practical resource to help them effectively carry out their responsibilities while focusing on key priorities essential to their role.

We invite you to explore the Best Practices for Independent Non-Executive Directors and share your experiences and insights with us.

The publication can be found here (Polish version only).

As part of ecoDa, in collaboration with Internet Security Alliance, we have developed an updated edition of “Cyber Security Risk Handbook” – a comprehensive guide designed to support Boards in navigating cybersecurity challenges. This enhanced edition addresses critical issues, including the unique challenges of the European market and emerging cyber threats associated with AI.

The guide comprises two parts:

• Key Principles – lays out six core principles to guide Boards in their understanding and oversight of cyber risk;
• Key Toolkits – a set of practical tools tailored for immediate use within companies; these include targeted questions and methodologies across various domains, such as M&A, ransomware, AI.

The documents are user-friendly, enabling Boards to focus on the sections most relevant to their needs. They feature examples, data and actionable suggestions to tackle specific challenges and dilemmas, such as defining clear responsibilities for cybersecurity within the organisation. We encourage you to download these resources and recommend them to all Boards for proactive and informed cybersecurity governance.

Links to download the publication:

• Key Principles
• Key Toolkits

We are handing over to you The Sample Independence Verification Form for Supervisory Board Members prepared by the Association of Independent Non-Executive Directors. This document facilitates the verification of independence of Supervisory Board Members (Non-Executive Directors) of public companies.

In the Association's view, the participation of independent Supervisory Board Members is one of the key conditions for effective supervision of a company. Therefore, ensuring effective independence is in the interest of all companies, their shareholders and other stakeholders.

Members of the Supervisory Board who have declared that they meet the independence criteria, should be subject to annual verification in this regard. This form may be helpful in conducting this assessment. We recommend that the Supervisory Board perform the aforementioned verification before submitting the Supervisory Board's statement on the appointment, composition and functioning of the audit committee, including the fulfilment of the independence criteria by its members, for the purposes of the annual reports. Ideally, this verification should take place in the form of a debate during a Supervisory Board meeting, based on the annually completed forms. We also recommend that the completion of the verification process materialise in the form of a resolution adopted by the Supervisory Board, which will include an assessment of the fulfilment of the independence criteria by individual independent Supervisory Board Members. This form can also be used by shareholders to verify their proposed candidates for independent Supervisory Board Members.

We draw attention to the European Commission Recommendation of 15 February 2005, according to which "The (supervisory) board may consider that, although a particular director meets all of the criteria laid down at national level for assessment of the independence of directors, he cannot be considered independent owing to the specific circumstances of the person or the company; and the converse also applies."

In situations where there is any doubt about the independence of a person, we recommend that such a person be considered as not meeting the independence criteria.

The publication can be found in the "Publications" section

The Association of Independent Non-Executive Directors together with the institutes from other European countries forming ecoDa, have jointly sent comments to OECD in relation to the revision of the “OECD Guidelines on Corporate Governance of State-Owned Enterprises”.

Appointments of board members of state-owned enterprises (SOEs) must always be based on merits. This is the main message from ecoDa to OECD as the international organization for Economic Co-operation and Development reviews its SOE guidelines.

“The appointment of oversight bodies in state-owned enterprises remains a subject of concern in all European countries, both at the national and local level. The State is often criticized for trying to micro-manage the company on the one hand and on the other hand for not being sufficiently vigilant as shareholder. Improvements will not happen without a transparent appointment process of trained and independent board members”, stated Rytis Ambrazevičius, Chair of ecoDa.

The overall objective of the OECD review is to strengthen the Guidelines to ensure that SOEs contribute to sustainability, economic security and resilience, by maintaining a global level playing field and high standards of integrity and business conduct.

To meet the OECD objectives, the ecoDa recommendations include: 1- The process of nominating board members (including the Nomination Committees) should be safeguarded from undue political influence; 2- Independence criteria should be clearly defined; 3- National laws/regulations should include guidance on when an Independent Non-Executive (iNED) can be dismissed; 4- The right for minority shareholders to nominate candidates should be reaffirmed.

It is necessary to ensure that the fundamental principles of good Corporate Governance are applied in order for the intervention of the State to be justified and in order to avoid any risk of political interference

“ecoDa perceives the Guidelines to be a very important document for improving corporate governance of state-owned enterprises in all OECD countries. In fact, we believe that they should apply equally to municipally-owned and regionally-owned entities. The ecoDa working group, comprised of members from different nations, concludes that undue political interference at SOEs is a serious threat in all European countries and hence effective safeguarding measures are of vital importance. Monitoring the implementation of these Guidelines is necessary and the OECD should consider taking specific actions in this respect”, concluded Filip Gorczyca, Chair of ecoDa’s Working Group on SOEs.

ecoDa’s news release can be found here.

We are pleased to inform that The Association of Independent Non-Executive Directors has joined ecoDa as a “candidate member”. We are looking forward to the honour of representing Poland at the European corporate governance table.

ecoDa is an independent actor and a unique umbrella organisation representing the main national institutes of directors in Europe. Its member institutes cover in total about 50,000 individual directors across 21 countries. ecoDa is a member of the Global Network of Directors Institutes (GNDI), an international network of director institutes, established to foster closer co-operation between its members, who are each recognised as the leading institute for directors and governance in their respective country.

We are pleased to present the second edition of our publication entitled “Sample Annual Audit Committee Work Plan – Second Edition”.

The current regulations have entrusted audit committees with a very broad range of responsibilities. This means that a considerable proportion of all the tasks stipulated in the law relating to supervisory boards rests on them. How to meet these expectations?

The Sample Annual Audit Committee Work Plan was developed to support audit committees by providing them with a tool to organise these tasks, enabling committees to plan them out over the course of the financial year, and reducing the risk that any of the duties required by the regulations are overlooked.

The publication was prepared by a team formed within the Association of Independent Non-Executive Directors comprising: Jacek Gdański, Filip Gorczyca, Katarzyna Ishikawa, Michał Rogatko, Piotr Skrzyński and Piotr Woźniak.

We strongly encourage all supervisory boards and audit committees to use the tool in their work planning already this year. At the same time, we invite all market participants to share with us any comments and suggestions regarding the scope and content of the document (This email address is being protected from spambots. You need JavaScript enabled to view it.).

The publication can be found in the "Publications" section