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Family Councils and Family Meetings

Family Councils are regular, structured forums or meetings of family members involved, or interested in, a family business. They are usually conducted at a Family Retreat and are designed to enable the family to maintain a reasonable level of communication amongst themselves regarding important issues that affect them and their family business.

Family Councils, when used in conjunction with Family Constitutions , provide a relatively painless and constructive way to convert family business Dictators into family business Leaders .

Businesses needs proper governance. Families need love, leadership and harmony. Therefore a family business somehow needs to have all of these. Part of this can be achieved through Family Councils - where regular meetings, with set agendas, rules and procedures, can be used to facilitate important communications between family members about issues of concern.

Family Councils guide and support the family in its dealings and relationship with the business by providing a forum where business issues can be communicated to the family and family issues can be communicated back to the business.

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Family Council Objectives

To provide a forum for discussing and resolving important family issues, including:

  1. Leadership of the business and the family.
  2. Managing and maintaining communications between family members, including mutual respect and shared visions.
  3. Business continuity, including buy / sell / merge / alliance decisions.
  4. Maintaining and evolving family business values and goals.
  5. Managing change including technology, business processes and risk.
  6. Preparation for retirement and succession, including encouraging, informing and training next generation family members.
  7. Hiring, career development and promotion (or otherwise) for family members.
  8. Counselling, training, re-training, positioning and firing family members.
  9. Responsibilities and privileges, recognition of different needs and circumstances, remuneration, terms and conditions for working members.
  10. Responsibilities and privileges, recognition of different needs and distributions to non-working members.
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Family Council Process

Many families use an independent facilitator to establish, develop and manage the meeting process - at least at first. Meetings are usually conducted away from the business. The first may take a full day, subsequent meetings may be shorter.

Meeting Guidelines

Stage 1 - Setting meeting, parameter and process rules:

  1. Meetings should be firmly and benevolently chaired and/or facilitated.
  2. Everybody attends the meeting as a participant. There is no general power of veto and everybody is encouraged to speak their mind, without fear of reprisals or embarrassment.
  3. Meetings should follow an agenda and keep to an agreed timeframe.
  4. Every issue or grievance is legitimate and is worthy of the family's attention. They should be aired and dealt with promptly, empathetically and practically.
  5. Meetings are designed to inform and educate, encourage debate, generate options, develop consensus and achieve closure on a wide range of family and business issues.

Stage 2 - Sample Issues for Discussion:

  1. The head of the business has done a terrific job to date, but they can't keep going on indefinitely as they have done in the past.
  2. The business needs to corporatise its operations, for various reasons, while maintaining its quintessential nature and values as a family business.
  3. There are family members ready, willing and able to take on more responsibility in the business.
  4. There are family members with little or no interest in having an active involvement in the operations of the business.
  5. Every family member, including non-workers and non-working spouses, have a legitimate interest in the business, its present and its future. Their needs and aspirations should be acknowledged.
  6. There were many good reasons for nurturing the business to its current state. The family now needs to agree where it is going in the future.

Stage 3 - Establish a standard agenda.

Cover all essential issues and have a set time allocation for each. A typical agenda will contain the following discussion topics:

  1. The family's goals and aspirations for the business - short, medium and long term - including values, investment, independence etc.
  2. Required balance between business and family - professionalism vs. protectionism. Includes performance reviews and actions.
  3. Required levels of skill and contribution from family members.
  4. Non-family managers.
  5. Independent boards of directors and advisers.
  6. Succession issues - including who, when and how? Includes preparation ("grooming") strategies and retirement / semi-retirement strategies.
  7. Rewards for family members in and out of the business.
  8. Mutual responsibilities.
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Benefits of Family Councils

There are few things more likely to generate dissent in family ranks than overt disempowerment and lack of communication. Family Councils help to avoid this situation by ensuring that family members have a regular opportunity to hear and to be heard with regard to the family business.

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