by Bhaj Townsend
Some families, when they hear the idea of designing a family council, cringe. They think, like some do about creating a budget, that forming a family council will be like creating a lifeless and uninspiring system. Gone will be the sense of trust and commune between family members. They think that family council meetings will be boring, didactic and even proselytizing in nature when they are set up merely to relay information that can just as easily be done in an email or carry out orders rather than engage in meaningful dialog.
But does this have to be? Let’s peer into the world of family councils and see what we can find out.
A great many of the successful families have found that the family council’s role is to be the conduit between the business and the family especially when not everyone in the family is in the family business.
Often they begin informally as family meetings and later develop into more formal family councils.
Family business members usually want to grow the company and non-business members want distributions from the company to grow their lifestyle. In this setting, the Family Council can play a great role in communicating between the two to develop greater understanding of the role of each.
During the early years of a family’s commitment to stay connected the family council may be more informal. The family may combine aspects of family fun with family games. Overtime they add an element of family development by exploring and eventually declaring their values as individuals and as a family. They begin to incorporate education by informing the family about what is happening in the family business or with the family’s financial wealth.
Let’s take the example of John and Betty H. They are members of a family who conducted family meetings between the two of them within the first three years they were married. They continued using them as their children grew. When their children were nearing the “leaving home” stage, John and Betty, felt they wanted to develop an anchor to keep the family connected once these emerging adults left home and forged their own paths.
Five years later, John and Betty find that the children still love their family meetings. It is a format to stay connected as a bigger unit than merely individuals at the same event. As a family, they talk about the family business which at least one child is considering joining. They talk about their new family philanthropic initiative. As the children have said, “We wouldn’t miss this meeting for the world. It’s a great way to keep us connected, keep us informed of the direction of the business while building the purpose of our family.” These meetings are inclusive which makes them meaningful for everyone, participatory, which makes them dynamic, and relevant to the roles in life the children and parents play.
Families with second generation family business leaders have found that the early meetings they had for family fun, growth and education have necessitated adding a formal family council. This council is in charge of distilling the concerns and questions the family members have about various initiatives they want to add to their family growth and education and to be a conduit between the family and the family business as it relates to distributions versus growth, policies of bringing family members to the business and other relevant topics.
Family councils are a great means of reconciliation between what the family wants for itself and the purpose of the family business or wealth. It keeps the separation between the two clear while building stepping stones of understanding between them.
Family council meetings are a great tool for families in strengthening their connections for years and generations to come.