Paying for Family Meetings
You advocate family meetings. But they can be quite expensive. Should the family business cover all the expenses? What about time off for family members who don't work for the family business?
Reimbursing family meeting expenses can be a very tricky topic. Yes, we believe family meetings are essential to satisfied, informed and committed shareholders. We think the costs are very justified and important to the business' welfare. Consequently, we agree with the typical policies we see in larger families. The family business pays for rooms, transportation, meals during meetings, and child care during meetings. Some set limits on these reimbursements like: double occupancy; standard rooms; coach airfare; child care up to $50 per day, etc.
Expenses generally considered to be personal responsibilities include extra nights, activities (i.e., golf fees, tennis lessons, etc.), and incidental room charges. It's best to clarify which expenses will be covered.
A major question is "time off with pay." On the surface it seems logical to offer work time to attend family meetings. After all, they are very much akin to shareholder meetings.
The rub comes for those family shareholders or spouses who do not work for the family business. If they take personal vacation time, there is a real sacrifice. Consequently, we find, most families with employed and non-employed shareholders schedule their meetings for weekends or holidays. Some turn holiday weekend family meetings into an enjoyable ritual.
A major disadvantage, however, is that holiday or weekend timing is difficult on non-family executives and outside directors that the family might wish to invite. If dates can be well anticipated and if, perhaps, compensating time off is offered to the non-family executives, this problem can be lessened.
Another challenging question is whether family members should personally pay for the costs of a nice family reunion party. In general, we think that's best as a personal expense that everyone chips in for. That approach provides a better impression to all at the company. Of course, parents can offer to carry the costs for the whole family. Some families have made that routine.
As each family reflects on the question of who pays for family meeting attendance we encourage several guidelines:
The first priority is for as many people to attend as possible.
Attracting those shareholders (and their families) not employed in the family business is crucial. Whatever it takes to have them attend is probably worth it.
Family members not employed in the business might volunteer some financial sacrifice to let all know their respect for propriety and business professionalism.
Defining the boundaries between family, shareholder, and business is difficult and complex. We welcome any ideas or suggestions that work for you.
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