Losing Control Through Family Meetings
With four adult children in the business, I increasingly recognize the value of family meetings. I've been hesitant to start the process, however, because I fear losing control. What if I'm outvoted on a key issue relating to the business? After all, I'm founder, majority stockholder, chairman, CEO and Dad! Is there a way to move forward, involve the family, and retain my authority?
We applaud your desire to involve your family and understand your concerns. Having family meetings is part of a process that ultimately transfers control to the next generation---it should not require you to abdicate at the first meeting.
Success in family meetings requires clarity concerning purposes, processes and ground rules. Depending on the purpose of your family meeting process, you may not be making decisions at all. If the purpose of your family meetings is as one family put it to "educate the family about the business, surface and explore family member concerns, and stimulate discussion within the family of issues related to our common bonds," then no decisions related to running the business are called for, and no threat to control is implied. Obviously though, by creating a forum for open discussion, the family/business leader opens him or herself to questions and a new level of accountability.
Other family/business leaders use family meetings to "seek input on issues where family and business interests overlap." In such cases, the leader clearly seeks ideas, information, feelings and opinions, but equally clearly retains final decision-making authority. For family members who had not traditionally been consulted about such matters, the opportunity to provide input is usually welcomed as a significant forward step.
Even if you'd like to get your family involved in certain decisions, you can still establish ground rules that allow you to retain control. Your family should recognize your authority and appreciate your invitation to participation in decision making. They should not balk if the ground rules include your explicit veto right.
Wise family leaders use family meetings as an evolutionary process, increasing scope and authority as the group gains experience. The process of transferring control is driven by increasing confidence on the part of the older generation derived from the very opportunities provided by family meetings to see the next generation in action as they work together to resolve inevitable questions regarding the future of the family and its business.
While your short-term goal remains protecting the business by retaining control, remember that long-term business success requires that control be "lost" to your successors.
Articles purchased or downloaded from Family Business Consulting Group® are designed to provide general information and are not intended to provide specific legal, accounting, tax or other professional advice. Since your individual situation may present special circumstances or complexities not addressed in this article and laws and regulations may change, you should consult your professional advisors for assistance with respect to any matter discussed in this article. Family Business Consulting Group®, its editors and contributors shall have no responsibility for any actions or inactions made in reliance upon information contained in this article. Articles are based on experience on real family businesses. However, names and other identifying characteristics may be changed to protect privacy.
The copyright on this article is held by Family Business Consulting Group®. All rights reserved.
Articles may be available for reprint with permission. To learn more about using articles for your publication, contact firstname.lastname@example.org.