Category Archives: In-laws

What Defines a Family Member?

Bernie Kliska

How does one determine who is a member of the family?

Last May, the U.S. Census Bureau reported that in 2010 married couples represent 48% of U.S. households.  The remaining households were comprised of single parents, live-in partners (same or opposite sex), divorced, separated or unattached individuals.  Further confusing the picture are blended families that are a hybrid of more than one family of origin.

The U.S. Securities and Exchange Commission issued a guide defining who is considered a family member (Dodd-Frank Act), which stated in-laws were not considered family.  Under this act, unmarried and same sex couples living together could be considered as family members. 

With so many variables, how do we decide who is a family member?  The answer can only come from the families themselves.  There needs to be a willingness to discuss the issues around this question without insult and recrimination. 

While this conversation may not lead to a consensus, it can generate an honest, powerful discussion on deciding who should be included in establishing policies for the business, as well as family and estate planning.  Having this discussion also helps emphasize to the family the importance of working together on complex matters.

Shifting notions of what constitutes ‘family’ is yet another variable that can challenge the senior generation’s dream that the family will all work together and stay together.  In our experience, if the senior family members are open to considering a sometimes broader definition of family, then the most important part of his/her dream… a supportive family and a successful family business…can be more likely to still come true.


Don’t treat your in-laws like a mushroom

Dana Telford

At the end of a recent presentation, I entertained a number of questions from audience members. One executive raised his hand and asked me how the best family business leaders in the world handle their in laws. His question was met with commiserating laughter from a number of other participants – so many family business owners struggle with exactly the same question.

Luckily, I’ve had a number of years to consider this question, discuss it with colleagues and observe the best practices of some outstanding leaders. So here’s how I came to my conclusion, and what it is:

– Put yourself in the moccasins of the in-law.  Walk a mile or two. How does it feel when you are excluded? Not good. You wonder why – are you not smart enough? Not trustworthy? Or is there a scheme being put in place? Exclusion breeds mistrust and mistrust is dangerous to business owning families.

– The cost of mistrust in a family business system far outweighs the risks associated with appropriate inclusion and information sharing. Share information about the family business, educate in laws on the basics of the business and ownership structures. But don’t invite in-laws to be a part of making decisions that they are not experienced or knowledgeable enough to make.

Is it possible that an in-law will create undue turmoil and tension in a family business? Absolutely. Is it probable? Only if business owners treat them like mushrooms – keeping them in the dark, nourishing them with bull puckey and cutting their heads off when they stick their heads up. The probability that they will add value to the system increases as they are given basic information about the business, ownership group and governance process and are included appropriately.