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Forming the First Family Council: Some Practical Issues

The importance of a Family Council is becoming well known to business-owning families. Yet starting one poses several tricky dilemmas.

  • How is the family defined?
  • How are early decisions made?
  • Who sits on the first family council?
  • How are beginning priorities and expectations set?

It's sort of a Catch 22. How do you start the process when you don't have a council to start the process?

Perhaps the following guidelines will be helpful. But, a reminder: Every family will develop its Council in its own unique way. After all, the make-up and history of every family is different.

  • Who is "family?" Most typically, the family is defined as all adults (18 or 21 and over)who are owners of the family's business and spouses, or beneficial owners and their spouses. In practicality, it is all those invited to the meeting in which an interest in developing a Family Council is initiated. Once the Council is established, it can take up the matter of more precisely defining who is family.
  • How are early decisions made? Depending on the size and mood of the family, early decisions are usually made by consensus. The smaller the family and the more emotional the issues, the more important consensus is during the first steps. On the other hand, if the family is very large and the Council isn't particularly contentious, then early in the process, someone can propose that until the official constitution of the Council is ratified, decisions will be made by 75-80% majority. Once formed, the Council start-up committee can then propose future decision-making processes.
  • Who is the first Family Council? Councils rarely begin with elections. Typically, a voluntary natural leadership group: perhaps a group of elders, or a next-generation self-appointed task force, or family members serving as executives in the business will serve as an interim council until the rules are developed. About 3-7 volunteers are a good number with which to begin. Initial committee meetings are usually open to all interested family members. A consultant or facilitator can be very helpful at this stage.
  • What are the beginning priorities and expectations? The process should initially have modest expectations. At the beginning, the committee's job should be to study how a Family Council might work for its own family. After doing research, the committee should report back to the family as a whole and offer options going forward.

Remember, the definition of a successful first family meeting is that it is followed by another one. With that in mind, the dilemmas of starting can be approached with inclusiveness, patience, and exploratory first steps.

 

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