Family Business Governance
In its simplest form, governance in families is a framework that clarifies:
- Who and how decisions will be made
- What and how information will be shared in order to enable transparency and good decision-making
Family business governance can take many forms from informal to highly structured depending on factors such as family size, business complexity, and the number of generations involved in the business.
Why complicate things with too much structure, you might ask?
When one or more businesses are the source of a family’s wealth, decades of research have demonstrated that it’s crucial to pay attention to the overlapping roles that comprise the family business system, including:
- Family members
- Business leaders who may or may not also be family members
A lack of clarity can lead to conflict which puts both the business and family harmony at risk.
Key to Pat’s consulting process is:
- Understanding the age and stage of your business
- Exploring the core values that have contributed to your family’s endurance and success
- Identifying key strengths and pain points between and among the business and family members
- Clarifying your aspirational goals for the business and your family members.
The goal of the consulting process is to develop working agreements that will address current needs as well as serve as foundation for the future.
Through individual stakeholder meetings, family meetings and planning group deliberations, we may begin by capturing on one or two pages an outline of how key family stakeholders will work together with each other and with key business leaders.
The consulting process lays the foundation for what could evolve into:
- A multi-faceted Family Charter which outlines working agreements and key policies on topics such as:
- Employment of family members
- Managing potential conflicts of interest
- Definitions of majority in the decision-making process
- Board structure with clearly articulated roles and responsibilities
- Development of family enterprise Governing Bodies which may include:
- Family/Shareholder Assembly
- Family Council/Family Board
- Business Board
- Family/Shareholder Education Plan which may include:
- Family education engagement strategy
- Need-to-know educational content with tailored delivery strategies
- Individual coaching and mentoring