Family Governance
Family Governance PDF Print E-mail

Family Governance is a topic that most families are reluctant to address. It covers two broad topics: governance of the business and governance of the family. Most family businesses, especially in the formative years, take on the characteristics of the founder or founding family. Although this entrepreneurial model works, as a company grows in size it needs gradual evolution to a different model. Boards of Advisors, Boards of Directors, and Professional Management are some of the ways to improve the governance of the business.

Family governance is a more subtle topic. Most families find that as they grow there is a need to formally discuss family issues like estate plans, family business leadership transition, and family fairness. Families find that some of the best venues to do this are through Family Councils, Family Retreats, and formal Family Meetings.

Specific Services

Board of Advisors

When the family business grows so that the leader finds that it is beyond his sole expertise to handle all aspects of the business, it is usually time to form a group of trusted peers into a Board of Advisors. A well conceived and run Board of Advisors can be invaluable to a company – many say that the most important step in their company’s growth and evolution was the addition of a Board.

Professional Management

Although family businesses often desire that key management positions are staffed with family members, sometimes family members are not interested, not qualified, or are engaged in other worthwhile vocations and cannot fill these slots. This is the time to consider hiring professional managers who bring their experience and business acumen to the family business. Professional managers often improve the overall performance of the closely held company. Professional management is also useful in providing Bridge Management. For example, when the next generation of family leaders are not quite ready to take on senior management roles, bridge managers can provide a connection between generations of family.

Family Council

Family councils provide families with a vehicle to entertain family projects and resolve issues. Some of these include developing Entry Criteria for new family members to enter the business, chronicling the family history, and ensuring that family fairness is considered in family and business decisions.

Family Meetings

Formal, scheduled family meetings inform family members of both the status of the family and the family business. Family members can reconnect with one another, and family issues can be discussed constructively rather than being left to fester into larger issues.

Family Retreats

Family retreats are conducted over two to four days at an off site location. They provide a neutral venue to discuss family and family business items.

The Family Business Institute Difference

Our commitment to helping you achieve breakthrough success is absolute. Drawing upon our unparalleled experience in working with family enterprises across virtually all industries and business functions, we educate our clients about the need to utilize a comprehensive and integrated approach for the benefit of their family business system. The Family Business Institute differentiates itself by addressing not only the typical financial side of the family business triangle, but also the other two sides which deal with operational and/or interpersonal issues.

Ready to Learn More?

In addition to the services listed above, the Family Business Institute can also assist you with many more services in the area of Family Governance. For more information, contact us at (877) 326-2493.