The caller told me that in her family, they have a family meeting every six months. I asked who is invited to the meeting: “All of the family members who own stock” she said. Spouses? “Nope.” Siblings who don’t work at the business? “No”. Adult children in the next generation in college? “Of course not.”
Another (and more descriptive) name for these gatherings would be a shareholder meeting. Why does it matter? To my thinking, excluding spouses, the next generation or any siblings (not working in the business) from a family meeting runs the risk of communicating ‘You’re not a part of the family.’
Eckrich and McClure’s book The Family Council Handbook does a nice job of differentiating among all the many different sorts of meetings
Very! Especially when it comes to elections that involve your family’s business. To be successful, family owners need to have good governance practices in place at least by the third generation. By that time, cousins own the business together, and decisions generally need to be made by a large number of people rather than a single owner or siblings.
Recently I was meeting with a family who were in the process of organizing their first Family Council. We talked about all of the exciting things the Council could do, such as creating the philosophy of family leadership in the business and drafting a family-employment policy.
A hand shot up at the back of the room, and a young woman asked: “But where does the Family Council get all of this power from? What if the Council does something the family does not agree with?” I explained that this power would come from all of the family members who were with us in the room that day. They would ultimately become the Family Assembly, which is usually composed of all of the members of the family. I told her it is generally the charge of the Family Council to draft the charter, but nothing could actually happen unless family members showed their support by voting.
Next, she asked who could vote? Would it be just the owners? Would spouses be included? How old would family members have to be in order to vote? I explained that the answers to these questions vary from family to family, but I assured her again the entire family would have the opportunity to vote on these issues. She looked greatly relieved.
Of all the voting family owners do, voting for family leaders is probably the most vital. Family Assemblies usually vote for Family Council members, and the Council members vote for who will lead them as their Chairman. That’s why when you have the opportunity to make this crucial leadership decision, please be sure to vote!
We hear from Family Council members that they sometimes dread going to Family Council meetings. There are a number of reasons why this happens, and it is not uncommon for Family Council members to feel burnt out from the long list of “to dos”, the lack of time ‘to do’ the work, and the feeling of being overwhelmed. The following five considerations might help to alleviate some of those feelings:
Ensure that the Family Council agenda is specific: does it have timeframes around discussions, does it include questions or comments for participants to reflect on and prepare for in advance of the meeting?
Avoid getting mired in details that are best left to committee members. This not only keeps those details where they belong, it shows that the Council has faith in the committee chair’s ability to champion and execute specific initiatives;
Recruit Council members who are interested in doing the work, making a difference. This may mean that you need to revisit the branch-representation rule, if you have one;
Prioritize objectives, and projects. If FC members constantly feel overwhelmed with Council work, it is possible that the initiatives planned for the next year or two are simply too ambitious. Projects can look great and sound wonderful on paper. Finding the time to implement them successfully can be impractical, given that most people are time-starved. Do what is do-able!
Stop beating yourselves up for what is NOT getting done. Look at what you’ve accomplished. Celebrate those accomplishments and communicate them to the family.
What rules, if any, should address what happens if you and / or other members of your family who own stock in the family business fall in love with an employee?
We’ve seen cases where that employee becomes an in-law and ascends to the highest offices of the company and then:
The couple divorces and the now divorced key non-family executive leaves a gaping hole in the management team after leaving the business;
The couple divorces and the now divorced key non-family executive remains in place and life goes on;
The couple never divorces and is a strong and positive influence on the business and the family.
Can having a written policy really trump the tidal pull of love? How can you legislate feelings? What are the risks inherent to this situation?
While there may not be a simple answer to these questions – we find the very best multi-generational business families are proactive. They do what they can to anticipate likely eventualities – while realizing they do not have a crystal ball.
Ideally families would have a policy around ‘relationships in the business’ in place before the next generation is 16. The best policies we find are those crafted and adopted by the family council – with broad involvement of family members, and a thoughtful preamble that explains the policy’s rationale. In cases where the family is too small for such a governance body, it falls to mom and dad to put the policy in place; again, before the next generation hits their mid-teens.
Whether or not the family permits or prohibits any kind of office romance depends on the family – and possibly the business culture. However, failure to think about these issues can lead a family to feel ‘blindsided’ when confronted with an actual relationship, which would then exacerbate the risk to the business and the family.
What is your family’s policy on love in the workplace?