A regional, privately held company that ranked high on the Cincinnati 100 list of top privately held companies in Greater Cincinnati and Northern Kentucky was poised routinely on the brink of Chapter 13.

How routine was the cash deficit? Something like every other quarter, he claimed.

The cause of the calamity was obvious, too.

Cousins, nephews, nieces, wives, husbands, aunts, uncles, sisters and brothers earning upward of $100,000 a year were saddling the company with salaries that were far more than warranted.

So did the firm, which must go nameless for obvious reasons, collapse under the weight of all that largess, all that nepotism, all the inevitable family in-fighting?

Nope. It prospered.

But imagine how much more wealth would have been created and retained if an unbiased advisory board had been convened to help control that payroll creep, says Ellen Frankenberg, a psychologist and chief executive of The Frankenberg Group, a Springfield Township-based family business consulting group.

"I think that with the recession, what you've described is less common," Frankenberg said.

"Companies that once gave very generous dividends to families are curtailing the practices. Companies have had to watch the numbers because the gravy train is over."

While a 1997 report from the Mass Mutual Financial Group survey of U.S. family businesses found that an advisory panel could be critical to a company's success, many family firms get by just fine without any board.

For Lesli Nieberding, president of Mach III Clutch Inc., of Ludlow, Ky., it's an issue of controlling costs. Outside boards and certainly consultants need to be paid.

"That can be expensive," she said.

Many companies that have advisory boards apparently don't do much listening anyhow. Five years after its first report, Mass Mutual found only half of the boards meet more than once a year.

And one in four firms insist that the advisory boards make no contribution.

But that is not the case at LaRosa's Inc., a Cincinnati-based chain of 55 neighborhood pizzerias.

Pete Buscani, executive vice president of marketing, says in addition to a larger advisory board of five members, the company has convened three smaller committees, which include executives who have no formal tie to the company.

The smaller panels consider issues such as compensation, culture and finance.

Buscani has no doubt the panels have been productive and are likely to remain that way for years to come.

"I know for a fact with the investment group that we've been able to more effectively steer our investments," said Buscani.

"And with the other boards, we get good perspective and great feedback."

E-mail at jeckberg@enquirer.com