For a Business Family there is
usually a Board of Directors to help guide and oversee the growth of the
Business. As the Family continues to grow through Next Gen Births and by
marriage and as the Family works to ‘pass-the-baton’, what mechanisms are in
place to help guide and oversee the growth of the Family that own the Business?
One Solution: a Family Council. A Family Council is
a group selected by the family-owners to, among other things, identify and
pursue the family’s goals; represent the family to management and the Board of
Directors; and oversee the family-owners’ goals and objectives over the year.
How does a Family Council work?
There is no “one-size-fits-all” template. In fact, an effective Family Council
is one that is designed for the specific needs and desires of the family that
it serves. Certain steps can help guide the process of organizing a Family
Council. First, the family should develop a Family Charter. The Family Charter
defines the vision and purpose for the Family Council, and it serves as the
foundational document to guide the Family Council. The Family Charter also
defines the core values to be communicated to the next generation. The size of
the Family Council should be determined by the size, needs, and focus of the
family.
Following the decision of the
basic structure, governance and goals of the Family Council, the Family Council
should also agree on the Meeting Ground Rules and Family Code of Conduct.
A properly structured and
implemented Family Council will help minimize ‘misaligned expectations’ and
provide another avenue to enhance Family Communication. Discussions within the
Family Council can help clarify the Boundaries between the Family and the
Business, a safe environment to discuss Family Employment policies, In-Law
participation, Business Leadership expectations, Conflict of Interest policies,
Shareholders Agreements, just to name a few. While this may first appear to be
rigid and formal, as in any Family gathering-having fun is a prerequisite.
Your family’s legacy is too
important to expect it to ‘just happen’. It is important to understand what
questions to ask, appreciate the sensitivity of the issues and conversations,
develop the ability to communicate with those impacted, and support more
satisfied lives. To lose family harmony due to a lack of understanding does not
help build a family legacy. A legacy of love, harmony, security, and business
success is the ultimate goal. As your business family focuses on the
development of the family and the business, you need not travel this journey
alone.
