Part 2: Models of Cooperation Between the Supervisory Board and the Family Business

In many—even large—family businesses, owners hesitate to establish a professional supervisory board with external members, fearing a partial loss of control, conflicts of interest, bureaucracy, or unnecessary costs. However, a well-managed appointment process and a carefully selected cooperation model can help avoid these risks. Companies that have taken this step have not only gained valuable management support but also improved their long-term success prospects.

Depending on the specific circumstances of the company, the supervisory board can operate in various models. Based on the owners’ readiness and the company’s organizational maturity, the board may range from informal advisory cooperation to the inclusion of individual independent experts, or even evolve into a strategic advisory body.

Which Model of Cooperation Works Best?

It’s worth considering several models that differ in their level of formalization and board composition. Which one brings the most benefits? That depends on the owners’ expectations and the company’s characteristics. When choosing a model, it’s important to weigh both its advantages and the challenges it may present.

MODEL 1:
Informal Advisory Board or Cooperation
An informal advisory board is the most flexible form of cooperation, where the family business draws on the knowledge and experience of external experts without creating a formal supervisory body. This model may be suitable for companies at an early stage of professionalization that are not yet ready for a full supervisory board.

Example:
A Polish family-owned food company created an informal advisory board consisting of an export expert and a digitalization specialist. With their support, the company increased foreign sales by 30% over two years, which led to the decision to formalize the board.

Main advantages of the informal model:

• Minimal formalities—inviting an expert is simple and allows for easy testing of the collaboration.
• Flexibility in selecting advisors and consultation topics, focusing only on key areas.
• Developmental benefits for family members through exposure to independent advisory voices.
• Opportunity to test collaboration with selected experts before entering a more formal, long-term relationship.

Challenges to consider:

• Lack of binding authority may limit the advisors’ influence on strategic decisions and reduce their motivation or accountability.
• Trust-building between the family and external experts can be difficult.
• The temptation to quickly end the relationship in case of disagreements, and potentially low tolerance for differing opinions.

MODEL 2.
Hybrid Board – Family and Independent Members Together
The hybrid model—a family forum with external experts—is the most partnership-oriented. Introducing one or two independent advisors into an existing family board, composed mainly of family members and long-trusted associates, is a step toward professionalization and competency enrichment without radical structural changes. It allows for a safe transition to a new way of working.

Advisors bring valuable expertise in areas such as digital transformation, HR, finance, succession, IPO/sale of the company, market expansion, or change management. Family members and advisors collaborate to achieve long-term strategic goals. Over time, this model can naturally evolve into a more formal structure that supports and oversees management. The hybrid setup can also be defined as a “pilot” if the cooperation is planned for a specific transformation period.

“Independent supervisory board members can help identify key risks and opportunities that often go unnoticed by family management teams,” says the CEO and owner of a large Polish company combining world-class financial expertise with the unique traits of a family business.

„Independent supervisory board members can help identify key risks and opportunities that often go unnoticed by family management teams,” says the CEO and owner of a large Polish company combining world-class financial expertise with the unique traits of a family business.

Main advantages of the hybrid model:

• New perspectives introduced while maintaining full family control.
• Trust-based collaboration that enables joint value creation.
• Increased credibility in the eyes of business partners and investors.

Challenges of the hybrid model:

• Potential strategic disagreements between independent advisors and family members;

• Family members’ dominant decision-making power may hinder the implementation of valid suggestions and reduce independent members’ motivation;

• Concerns about confidentiality in family matters discussed at the board level, highlighting the importance - and difficulty - of building mutual trust and maturity.

MODEL 3.
Balanced Supervisory Board in a Full Model

A balanced supervisory board combines family members, independent experts, and trusted collaborators, forming a formal body that balances family interests with business needs. This model is recommended for mature family businesses aiming to boost competitiveness and prepare for expansion or succession. A balanced board is better equipped to provide strategic oversight and typically meets diversity criteria, which significantly enhances its effectiveness and objectivity.

In Poland, this model is increasingly associated with corporate governance requirements and growing awareness of the need for diversity in supervisory bodies. Implementing this model requires key decisions, such as:

• What role should the board play—oversight, advisory, or partnership?
• What candidate profiles and board composition are most appropriate?
• What documents and regulations should be created to define its operations, and when?

In this model, it’s advisable to seek support from professional service providers—both for recruiting suitable candidates and for drafting governance documents..

Main advantages of a balanced supervisory board:

• Professionalization of oversight and future governance standards
• Diversity of perspectives and competencies, supporting better strategic decisions
• Strengthened oversight of management, increasing transparency and professionalism, and enhancing the company’s credibility
• Support in succession planning through objective insights from independent professionals
• Better preparation for succession, IPO, company sale, or market expansion

Key challenges:

• Higher costs due to compensation for independent board members
• Greater formalization, requiring more maturity and awareness from the family and owners
• Potential significant differences in views between family members and external experts regarding strategy, values, and priorities

MODEL 4.
Strategic Advisory Body with Full Ownership Oversight (Modified Model 1)
This is an interesting variation of the informal advisory board described in Model 1. The “Advisory Board” is a specialized group of experts focused on selected strategic areas such as innovation, international expansion, or digital transformation. This model suits companies needing support in specific, complex projects and seeking unique competencies critical to their growth.

“We established a Strategic Advisory Board - a group of world-class experts whose extensive networks and unique experience allow us to monitor market conditions in real time, draw appropriate conclusions, and build competitive advantage, ensure stable and sustainable growth, and responsibly manage risk in times when geopolitics shapes the future of the energy sector,” says the CEO and founder of the third-largest fuel company in Poland.

Benefits of establishing an Advisory Board:

• Ability to engage unique, high-level specialists
• Tailored selection of experts aligned with strategic goals
• Increased innovation through fresh perspectives on challenges and risks
• Inspiring environment for discussions about the company’s future
• Positive impact on the company’s market image as one investing in strategic development and competencies
• Natural development of owners’ and management’s competencies through interaction with top-tier experts

Challenges of the strategic advisory board model:

• High costs associated with engaging highly qualified experts
• Risk of competence conflicts if boundaries are not clearly defined
• Potential dependency of management on the board as a source of unique knowledge, which may weaken management’s autonomy and blur operational accountability

Summary

It’s important to emphasize that the supervisory board does not command or take over management responsibilities. Decisions and authority remain with the owners. However, the presence of a supervisory board increases the organization’s credibility in the eyes of the market, builds trust among investors, banks, and business partners, facilitates access to capital, and minimizes the risk of potential mistakes.

Thanks to the diverse perspectives of supervisory board members—regardless of the chosen model—the management team, owners, and the broader family gain an independent, objective viewpoint. This enables more balanced and thoughtful decision-making, ultimately leading to better outcomes than would be possible within a narrow, family-only structure.

Author: Małgorzata Wnęk - Kolaska

Family businesses that achieve business success and build strong prospects for further development face significant challenges related to the professionalization of management. At some point, there also arises a need to separate ownership from operational leadership. Rapid macroeconomic changes and market challenges show that good decisions increasingly depend on the ability to take a strategic view from multiple perspectives, as well as the organization’s capacity to benefit from independent reflection. Critical challenges also emerge around succession planning and the owner’s desire to preserve the company’s values for future generations.

“I’m not ashamed to say that the world today is too complex for me to handle its challenges alone,” says the CEO and founder of the third-largest fuel company in Poland.

One solution to these challenges is the appointment of a professional supervisory board. Depending on the company’s specifics, stage of development, strategic goals, and family dynamics, the board can add value by fulfilling various roles—supportive, advisory, or supervisory.

Appointing a Supervisory Board Is a Strategic Decision - Not a Revolution

An evolutionary approach helps tailor the cooperation model to the company’s current needs and ownership structure. A well-constructed supervisory board becomes a partner that inspires and supports the company in achieving competitive advantage and increasing its ability to endure across generations. In family businesses, the board naturally professionalizes ownership oversight and management, introducing an independent, objective perspective that helps separate family matters from business operations.

Before You Appoint a Supervisory Board, Consider These Steps

Professionalizing company management requires the owners’ commitment, consistency, and a systematic approach. Transitioning to a chosen cooperation model with the board can be based on steps that help the family adapt to change and avoid pitfalls or resistance from key stakeholders.

STEP 1: Analyze the Needs of Your Company and Family.
It is the owner’s responsibility to define what competencies are essential in the context of the company’s business strategy, ambitions, and expansion plans—e.g., knowledge of new technologies, foreign markets, financing, capital transactions, or HR—and which of these are currently lacking. These competencies can - at least partially - be supplemented by experts invited to join the supervisory board..

STEP 2: Start Subtly
Inviting one or two new people to the board can bring a fresh perspective without disrupting the existing dynamic. Regardless of their industry or domain experience, board members should have strong interpersonal skills to ensure good communication and effective collaboration. The process should involve only individuals with high reputations and ethical standards.

STEP 3: Use a Transitional Phase
An informal structure with clearly defined expectations—such as a specific task with a set timeframe—is a good starting point. It allows both sides to build trust and clarify expectations, and if necessary, makes it easier to gracefully exit the relationship if the cooperation doesn’t work out.

STEP 4. Formalize and Professionalize as Soon as Possible
Gradually expanding the board’s responsibilities is a deliberate step toward professionalizing ownership oversight. The key is not to stop halfway, but to consistently implement further steps to strengthen the board’s competencies based on ongoing experience..

Appointing a Supervisory Board Is an Investment in the Future! How Can You Minimize Potential Risks in This Process? 

First – Communication. Regular meetings, scheduled sessions, information exchange, and clear rules of cooperation are the foundations that build transparency, trust, and the board’s effectiveness. These principles help minimize the risk of board members focusing too much on their personal goals—which is a common concern among family businesses—and also prevent the risk of owners underestimating the value contributed by advisors—a concern often held by board members.

Second – Feedback. It is essential that family business owners or members of the owning family take responsibility for monitoring the board’s work and providing constructive feedback. Regular information exchange helps build the trust necessary for this collaboration and serves as a preventive measure against potential conflicts.

Third – Mentoring. Board members, who typically bring extensive experience, can act as mentors, supporting the development of the management team’s skills. Cooperation between the supervisory board and the owning family offers a natural opportunity for learning from high-level experts—especially valuable for successors entering the business world. From the perspective of the “senior generation,” mentoring from an advisor can be particularly helpful in the succession process, which involves not only business dilemmas but also many other personal and emotional issue.

Summary

There are no perfect solutions, but the sum of benefits from appointing and working with a supervisory board can be substantial! If your company is undergoing transformation, considering succession, planning expansion, or simply wants to operate more dynamically and professionally, inviting external experts to the table—as independent board members, either individually or as part of a collegial advisory body—can be a powerful catalyst for building a modern enterprise and delivering excellent results.

Author: Małgorzata Wnęk - Kolaska

Supervisory Board – Legal and Business Perspectives

The supervisory board is a corporate body whose role is formally defined by the Commercial Companies Code, as well as by company statutes and internal regulations. This is an important but primarily legal view of the board. There is also a purely business perspective—from the viewpoint of entrepreneurs, company founders, investors, and shareholders. These stakeholders often see the board as a combination of a supervisory, expert, and advisory team, and as “challengers” to the company’s management team. The supervisory board also acts as the owners’ “eyes and ears,” overseeing the company’s development direction, day-to-day operations, key decisions, investments, and strategic moves. Therefore, the role and perception of the supervisory board vary widely in the market, depending largely on the awareness and experience of those who establish and participate in these boards.

Styles of Supervisory Board Functioning in Practice

One of the most common questions from family business owners considering the creation of a professional supervisory board is about the format of its work and what it looks like in practice. This varies greatly depending on the organizational culture and the founders’ decisions. Some boards are highly active, meeting frequently and working closely with management and owners. At the other end of the spectrum are “facade” boards—established solely to meet formal requirements. These boards are not expected to be active, and their meetings may be limited to passing resolutions required by law and the company’s statutes, closing the financial year, and approving management reports.

Factors Influencing Board Effectiveness

Between these extremes lies a wide variety of board practices, shaped by the nature of their work and the profiles of their members. Owners’ expectations, board members’ competencies, and their individual attitudes and engagement determine the value they bring to the company’s development. Sometimes, individual members find specific areas for direct collaboration with the company—supporting particular projects, initiatives, transactions, or investments—always with mutual agreement and interest.

Board Member Compensation – A Challenge

A common issue is the non-market level of compensation for supervisory board members. This often stems from underestimating the board’s role and its potential added value for the company’s success and growth. This may be partly due to the poor reputation of long-standing bad practices, especially in public sector companies, where board appointments were based not on expertise but on connections and the opportunity to earn extra income with minimal effort.

Market-Level Compensation and Models for Setting It

Compensation levels vary widely—from a few thousand to even tens of thousands of PLN per month in the largest entities (though this is increasingly rare). Compensation should be paid monthly, not per meeting attendance.

For comparison, supervisory board member compensation relative to average wages in Western European countries and the U.S. is significantly higher.

Ultimately, the level of compensation depends on the owners’ decisions. Boards that serve only a formal function should be viewed differently from those actively involved in the company’s affairs, contributing knowledge and experience, reducing the risk of poor decisions, identifying new growth directions, or influencing the selection of top management candidates.

Positive Changes and Growing Professionalization

To conclude this brief overview of human factors—selection and functioning of supervisory board members—it’s important to highlight the significant positive changes in recent years. We are witnessing a substantial influx of knowledge and best practices from abroad, along with a growing understanding of the role of professional supervisory boards—both in the market and within family businesses.

Two Perspectives on the Role of the Supervisory Board

The supervisory board is a corporate body whose role is defined by the Commercial Companies Code and the company’s internal documents. This is the formal-legal perspective. Alongside it, however, there is also a business perspective—viewed through the eyes of entrepreneurs, investors, and shareholders. For them, the board is not only about oversight but also about expert, advisory, and strategic support. It is expected to act as a partner, but also as a constructive challenger to the management board. Additionally, it serves as the owners’ “eyes and ears”, monitoring the company’s direction, key decisions, investments, and operational activities. In practice, the role and significance of the supervisory board are understood differently depending on the owners’ expectations and the experience and awareness of those who form the board..

The Specific Nature of Supervisory Boards in Family Businesses

In family-owned companies, supervisory boards are often perceived as closed bodies, typically composed of family members and trusted advisors—such as lawyers, tax consultants, managers, or friendly entrepreneurs.

Trust is seen as a key element. The search for new members is often limited to well-known and proven individuals. However, it is often worth complementing trust with expertise and experience, which may not always be found within the family or close circle. One of the main methods for finding such individuals is through executive search firms, which can identify and recommend suitable candidates to the business owners..

Expectations Towards Board Candidates

Expectations from family business owners vary. Companies often seek individuals from the same or a related industry, who understand its specifics, possess relational capital in the sector, and have a recognizable name—or in HR terms, personal branding or reputation.

Bringing a well-known individual into the company, beyond their substantive value, also offers marketing benefits and can positively influence the company’s market perception. People with a good reputation and visibility often have an advantage. However, this does not refer to “celebrities,” who may be controversial or risky.

As one family business owner put it:
“We want to invite someone we can trust—who won’t share internal information outside the company and who will act solely in its interest, not their own.”

The Executive Search Process for Board Members

From the company’s perspective, the process should begin with defining the expected added value of the future board member. This determines the required experience and desired personality profile. If an executive search firm is used, and the profile is well-defined, the firm will begin direct search activities, leveraging its network, databases, market knowledge, and industry expertise.

These projects are often—but not always—confidential, so the client’s name is not disclosed at the early stages. Trust in the advisor is crucial, as the client relies on their recommendation to reveal the project to selected candidates. This is usually preceded by signing an NDA or confidentiality agreement. Executive search allows for broad recruitment without disclosing the company’s identity. However, if the company conducts the recruitment independently, defining expectations remains just as important..

Key Factors in Candidate Selection

Family business owners often ask: What is the optimal profile for a supervisory board member in a family company? The answer depends on the specific situation and the expectations tied to the role.

In practice, the first deciding factor is often relational capital—how well-known the person is among decision-makers and influencers: owners/shareholders, their families and networks, executive search firms, investment banks, law firms, or other board members.

The second key factor is market reputation, or the candidate’s personal brand. If their name comes up in discussion, it’s easier to recognize and verify—e.g., via LinkedIn or Google.

The third factor is references—trusted individuals in the market who can vouch for the candidate’s expertise, reliability, diligence, and accountability.

A major advantage is prior experience on supervisory boards, which reduces the risk of misunderstanding the role—so different from executive functions. For larger companies, experience in board committees is especially valued. Also helpful are general business and market understanding, industry knowledge, and expertise in finance, law, or new technologies..

Author: Piotr Wielgomas

During meetings and conversations with family business owners, we often hear questions about how supervisory boards function—especially regarding the participation of independent (i.e., non-family) members. Below are the most frequently asked questions and answers that help clarify common concerns.

1. Won’t an independent board member learn too many company or family secrets?

Every supervisory board member is legally bound by confidentiality obligations under applicable law. These rules are especially strict regarding trade secrets—i.e., information with direct business value. These obligations apply both during and after the term of service and are indefinite. Breaching them may result in civil liability or even criminal penalties (up to 2 years of imprisonment).

This means that no board member may disclose any information learned in connection with their role if the company considers it confidential.

Appointing an independent board member does not introduce additional risk in this area.
Moreover, a well-managed selection process should involve only individuals with high reputations and ethical standards..

2. Are we giving up partial control of the company to an outsider?

No. Every board member is expected to act in the interest of the owners. Furthermore, neither individual members nor the board as a whole manage the company’s operations. They do not have the authority to interfere in day-to-day activities. In fact, the law prohibits the board from issuing binding instructions to management regarding company operations.

As the name suggests, the supervisory board oversees the company’s activities and serves as an internal advisor to management.

Shareholders may choose to grant the board additional powers—such as requiring board approval for certain management actions—but this is entirely at the owners’ discretion.

3. Doesn’t an independent board member just add bureaucracy and burden the family board?

They shouldn’t. Legal mechanisms exist to allow the company to benefit from the independent member’s expertise without overburdening other board members—especially if those are busy family members.

For example, the board may delegate specific supervisory tasks to the independent member, allowing them to support management on an ongoing basis with strategic initiatives, transactions, or international expansion.

4. What if I can’t get along with the independent board member?

Any board member can be removed at any time by a majority of shareholders. Additionally, the company’s articles of association may grant founders personal rights to appoint or remove specific board members by written declaration.

A board member serves only as long as they retain the owners’ trust. There is no legal risk of someone becoming “entrenched” in the company structure.

A well-managed selection process should significantly reduce the risk of incompatibility.

5. Isn’t appointing an independent board member too expensive for the value they bring?

Board members should be compensated. The amount and form of compensation are subject to mutual agreement.

The compensation should reflect the expected level of engagement and outcomes, and ensure the member’s impartiality in relation to management.

Board members should also be reimbursed for expenses related to their duties—such as travel, accommodation, or other costs directly tied to their work for the company.

Author: Karol Maciej Szymański

Since the Family Foundation Act came into force, considerable time has passed. However, when reviewing proposed family governance structures within family foundations, it’s clear that the relationships between the family foundation and the family business, as well as within the foundation itself, are still not fully understood..

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).

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.

A PDF version of the Form can be found here, while a Word version here.