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Why every family business should be thinking about it's board
Our research into family businesses in Ireland found that two-thirds operate with informal, family-led governance only. No external board members, no formal structures, and simply the family getting on with it. That works for many firms, particularly in the early years when decisions are fast and trust is high. However, our research also found that one in three family businesses has experienced a dispute that directly impacted business decision-making. In 13% of cases that dispute had a major business impact and in 4% it led to a change in leadership or ownership.
Explore the findings of the ifac Family Business Report 2026
Discover more insights like this from ifac's inaugural SME survey, capturing the experiences, concerns, and ambitions of family businesses across Ireland.
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The problem with "we'll cross that bridge when we come to it"
Our findings show that the businesses most likely to report disputes are those with 10 or more employees and turnover above €1 million. These are businesses that have started to scale and the informal approach that got your family business to where you are can become the very thing that holds you back.
When there is no structure to resolve disagreements, no independent voice to challenge assumptions, and no process for making difficult calls about the future, small frustrations develop into something more serious. Even a modest board creates a space where those conversations happen before they become crises.
What a board actually does for a family business
For most SMEs we’re talking about one or two independent non-executive directors sitting alongside the family leadership, meeting quarterly and bringing three things the family often can’t provide for itself.
Perspective
Someone outside the family dynamic who can ask the questions nobody inside the business wants to raise, around succession planning, investment priorities, and whether the business is growing strategically or simply staying busy.
Process
A rhythm of accountability - financial reporting, strategic review, performance conversations - that lifts the business out of the day-to-day and forces it to think about where it’s going.
Protection
When the time comes to sell, bring in external investment, or transition to the next generation, buyers and investors want to see governance. A business that has been making decisions through a functioning board is worth more than one where everything runs through a single individual’s instincts.
"Pick people who understand your scale, be honest about what you need, and don’t appoint friends. The value of an external director is their independence."
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What not to rush into
The answer is not to go from zero to a full formal board overnight. For a business turning over €1–3 million, that can feel expensive and not part of their culture. We generally suggest starting with an advisory board of one or two experienced people who meet with you regularly and hold you to account, with no legal obligations and no formal appointments.
Pick people who understand your scale, be honest about what you need, and don’t appoint friends. The value of an external director is their independence and ability to challenge. And don’t wait until you’re in trouble. The businesses that get the most from governance are the ones that put it in place when things are going well.
The practical reality
Our research found that only 16% of family businesses currently have independent non-executive directors. These firms tend to scale more confidently, manage family transitions more smoothly, and achieve better outcomes when they exit. We encourage every family business we work with to start the conversation about what a board could look like for them.
Explore the findings of the ifac Family Business Report 2026
Discover more insights like this from ifac's inaugural SME survey, capturing the experiences, concerns, and ambitions of family businesses across Ireland.
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