Four Questions, Two Directors: What Family and Private-Company Boards Should Focus On

The complexity facing boards of family-owned and privately held businesses has sharpened in 2026, with a faster pace of technological change, shifting workforce demographics, rising expectations around transparency, and the constant pull between preserving a legacy and staying relevant, all landing on the agenda at once.

We asked two seasoned directors and CFAR Principals who see these pressures from different seats. Todd Smith, a CFAR Principal, serves as the non-family chair of Delta ModTech, a family-owned business, and Caleb White, also a CFAR Principal, is both a member of the Ensign-Bickford family enterprise and an independent director at the Lee Company and MGX Beverage.

Question One: How Should Boards Think About Talent, Succession, and Who Sits at the Table?

Todd Smith: Most family boards start with a majority of family members, often to ensure branch representation rather than the skills the boardroom needs. As it matures across generations, a board reaches a turning point. The boardroom is not the place to simply monitor the business. It is an investment families make to bring in expertise to help envision and achieve a desired future. Once this is recognized, a majority of non-family directors become attractive, complemented by a few family directors who bring both deep relationships within the family and genuine skill sets. Leadership follows the same logic and can swing between family and non-family CEOs; the job changes with scale, since taking a company from $10 million to $25 million is very different from reaching a billion. Smart families accept that employment is not guaranteed and focus on being good owners together.

Caleb White: The hardest questions here — persuading a resistant founder to bring in an outside director, or adding independence without losing the culture that built the company — aren’t new; boards wrestled with them years ago. What’s changed is the environment and its pace. The greatest need today is for the board and the family’s owners to avoid becoming too insular and to keep a finger on the pulse of everything moving at once across technology, regulation, the workforce, and supply chains. That’s why advisors matter, whether consultants, directors, or a peer-group brain trust. They help you see how other businesses are adapting. Then the family can ask the real question: how do we stay true to our values and our secret sauce while adapting enough to stay relevant?

“The boardroom is not the place to simply monitor the business. It is an investment families make to bring in expertise to help envision and achieve a desired future.”

Question Two: Private Companies Are Facing More Scrutiny. How Should Boards Respond?

Todd Smith: One advantage of being privately held is that the scrutiny is fundamentally different from that of a public company. A public company must disclose where it’s investing and why. Imagine a company that hunts for treasure and wants to fund an expedition in the middle of the Pacific. It has to disclose that, which tells every competitor what it’s doing. If it fails, the scrutiny over the spending only intensifies. A private company can fund that same exploration anywhere, and no one knows until it’s ready to talk about it, a real strategic advantage. Internally, shareholder interest can turn into scrutiny, but if the ownership group is well tended, with transparency and real access, that scrutiny is easy to manage and can even be turned to the group’s advantage.

Caleb White: I’ll be honest, I don’t fully accept the premise that scrutiny is only a burden. Even amid heightened transparency and regulation, there are many public-company practices that private companies should adopt to the extent that makes sense. One of the fastest ways is to hire talent from organizations that have lived in those environments, people who know which parts of regulation, process, and SOPs add value, and which don’t. There’s an old figure that going from private to public adds roughly 5 to 7% in cost, so access to public capital had better be worth it. And with private equity and sophisticated family-office capital in the mix, those investors expect accountability and transparency, which usually drives better performance for everyone.

Question Three: What’s the Right Board Posture on AI and Digital Oversight?

Todd Smith: I’ve been around long enough to have seen many things called “AI.” I was there for the birth of the internet, when boards wondered whether people would ever buy a car online without a test drive, and for Y2K, when the fear was that every computer would shut down at midnight, a giant nothing-burger. But we must always be open to the possibilities of new technology, so the best privately held companies are actively experimenting now. In a family enterprise, though, the decision isn’t only about risk and reward; it’s also about values. Picture a company that is the primary employer in a small rural town: AI might let it cut 30% of its staff and still function, but the board may choose not to because the family won’t let the community down. That’s what gives AI an extra dimension here; there’s more at stake than the bottom line.

Caleb White: AI is on the mind of everyone in the boardroom, and the instinct is often, “I’d better find a director who’s up to speed on AI.” I’d push back. It doesn’t hurt to have a director with a facility for technology, but any one member sees only a business or two. What you need is management engaging with consultants and advisors who look across 20, 30, 40 companies. Get AI on the agenda, educate the board and management, and bring in outside voices on the competitive landscape. It’s not a one-and-done exercise; it belongs on a recurring agenda, in the audit and risk committee or the full board, and in the annual strategy process and how you weigh acquisitions. What we’re looking at in two or three years will be vastly different from what we’re looking at today.

“Board oversight of AI is not a one-and-done exercise; it belongs on a recurring agenda.”

Question Four: Where Should a Board Spend Its Energy on Strategy and Long-Term Value?

Todd Smith: A board’s purpose is threefold: hire a competent leader and hold that leader accountable, manage risk for shareholders, and build a compelling, achievable vision for the future in coordination with the CEO. That is its full-time focus. Where a board should not spend time is refereeing shareholder dynamics or sitting through a forty-page deck built to convince it everything is fine, a sign of an ineffective boardroom. Nor should it reach into the organization through committees to patch a capability gap or a poor hire; the board is no surrogate for putting the right people in the right seats. The best boards focus on the future state and its risks, partner with the CEO as a think tank while management executes, and assess themselves regularly, often using a skill matrix that maps directors against the skills the strategy requires.

Caleb White: I’d frame the division of labor cleanly: the board pressure-tests and approves the strategy, but developing and executing it is management’s job. The board’s real work is to watch the strategic milestones, track progress, and, when they change, understand the root cause and what it means for investments in people, capital, time, and focus. A resource plan and a talent plan follow the strategic plan, and no plan is exactly right five minutes after it’s written. So the critical partnership between board, CEO, and management rests on a transparent, ongoing account of what’s working and what isn’t, where directors can share their battle scars so management avoids the same traps.

Two Seats, One Table

For all the differences in their vantage points, Todd and Caleb return to the same throughline: boards that endure resist insularity, respect the line between governance and management, and hold their values and their capacity to adapt in the same hand. The pressures of 2026 don’t change the fundamental job of a family or private-company board; they simply raise the cost of doing it poorly. At CFAR, we’ve had the privilege o