Invited Accountability

Steve McClure
Steve McClure

Business families with “accountability issues” often describe them in two ways.  The shareholders who do not work in the business, whether actual shareholders or family members in line to inherit, will see it one way:

My relative running the company is not accountable to the rest of the family.

The interpretation from those involved in operations of the business see it another way:

My relatives are trying to impose accountability and they do not have the background or experience to do so.

While there may be cases of individuals who just don’t want to be held accountable period, generally speaking, family managers are resistant to being held accountable by “ill-equipped” family members.  Resistance is also emotional, as family shareholders who want to impose accountability are seen as ungrateful for the care, sacrifice and achieved business results of the past.  The idea of accountability is not resisted; in fact, they feel they already are being accountable.  Shareholders don’t want to take it on faith however, they want proof.  However, it is very difficult for even the most qualified family member to hold another family member accountable.

Business families who break through this impasse, or avoid it altogether, do it by utilizing objectivity; in the form of a wise, universally trusted advisor or senior manager who can interpret and build receptiveness in family-to-family communication.  One we know is quoted regularly by all as saying, “There is management’s view and there is the shareholder group’s view, and then there is the right way to do it.”  Or, objectivity comes from strong, universally trusted independent directors making use of formal board procedures and appropriate involvement of management and shareholders.  Whatever the form, business leaders are more likely to welcome accountability when individuals are involved who are unbiased and understand business.

It is difficult for a family group of shareholders to establish the objective resource they need; they are loosely organized and their motivations may be suspect no matter how open and transparent their methods.  Management is better equipped due to access to organizational and financial resources.  However, if they don’t actively involve family shareholders in an open and transparent process they will not have full trust either. 

When family managers lead in resolving the accountability issue, and do it well, they demonstrate a sincere form of invited accountability.


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