Purpose of a Family Council

FAMILY COUNCIL GUIDE

Purpose of a Family Council

The Family Council provides shareholders the opportunity to participate in both the current mission and future vision of the family business. It is a time when family members who work at the firm have the opportunity inform shareholders who are not employees, as well as other family members and children who will eventually become successors, about the status of the business. Council members are capable, trusted leaders of the firm who demonstrate a willingness to balance business concerns with the needs of the family.

The Council should formulate a mission statement. An example might look like this:

“The mission of this Family Council is to gather in an atmosphere of trust and mutual respect, openly expressing ideas and concerns, and making important decisions to secure the stability of the firm for future generations.”

How often the Council meets should be tailored to fit the needs of the company. The Council might gather as often as 2-4 times a year for a few hours to keep everyone in the loop. Conference calls can also be a way to keep the lines of communication open. Larger issues may begin to become apparent during these more informal sessions. Those critical topics can then become the focus of the annual or bi-annual comprehensive retreats.

· An effective Family Council requires a willingness to challenging resistance, communicate without fear, and take decisive action.

Defining Family

Superficially the definition of family may seem obvious, but in reality, the definition is perpetually evolving. Change has been occurring rapidly over the past few years. New types of publicly recognized relationship have become accepted. There has been a rapid rise in co-habitation, divorce rates, single-parent households, same sex partnerships, and extended families that include kin and non-kin members (Trask).

The topic requires attention because it is likely that stakeholders in the business born in the 50s, 60s, and 70s are likely to have very different opinions that than those born in the early 80s and mid-90s. Commonly referred to as Millennials or Gen-Y, this demographic grew up during the early days of the technology and communication revolution when email and cell phones started to become the new normal. The tech-revolution reached maturity with the Generation Z demographic (mid-90s to mid-2000s), who are regarded as being extremely tech-savvy, and possessing strong views regarding politics and current affairs (Barr).

Defining Family:

A family consists of individuals connected through emotional, legal, and kinship ties.

Recognizing that the unique lens through which each succession of generations views the world is crucial in understanding each other. Listening respectfully, with a willingness to keep an open mind, can not only reduce conflict, but it can exponentially take a family business to new levels of success. When the vision and mission of the family is enterprise is centered by life experience of the current leaders, then fueled by the energy and adept skills in technology and social media of their future successors, there are no bounds to the growth and profitability of the family enterprise.

 

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