Family Business Council
Open communication and understanding the goals and direction of your family business are two very important factors that will contribute greatly to your success. Many family businesses lack commitment to structure. They fail to create an organization plan and fail to deal with conflicts that arise among family members that are actively involved in working for the business. Additionally, family members involved in running a business together sometimes experience friction when attempting to agree on how the family business should be directed.
One of the greatest mechanisms that fosters communication, structure, and planning is the development of a Family Business Council. The members of a Family Business Council are responsible for discussing the dynamic that exists within the business and making decisions on how to handle issues that arise among family members who are involved in the day-to-day operations of the business.
Resolving Conflict is the Goal of a Family Business Council
It’s often easier for a family to sweep conflict under the rug rather than address it. But disagreements that are not handled swiftly and correctly can eventually lead to larger problems. The Family Business Council is tasked with discussing any such conflicts and coming up with a resolution to be presented to the business leaders, the board of directors, or the shareholders. In short, a Family Business Council assists the family business in resolving conflicts and planning for a successful future.
“Many families find it effective to create a forum where business can be discussed and family members can be educated about business matters. This is a gathering place for all family members, whether involved in the business or not.”
Blog Post April 7, 2011 “‘Because I said so’ is Not a Corporate Governance Structure”
Who is Appointed as a Member of a Family Business Council?
In most cases, the most logical members of a Family Business Council are family members that have an interest in the business but do not work directly for the business. This allows the council to keep the best interest of the business as a top priority. While there may be a desire to have a large council, a small group is often a smarter choice – especially when families are prone to conflict.
What’s In the Best Interest of the Family and the Business?
A Family Business Council has the best interest of both the family and the business in mind at all times. The council has a challenging task because the members must work together to suggest resolutions to current issues facing the business.
Not all family businesses understand the importance of a Family Business Council, and therefore they neglect to develop one. If your family business requires guidance and direction with conflict resolution, having a Family Business Council might be an excellent solution.
Does Your Family Business Need Help?
Family Business Matters has extensive experience assisting family businesses in the development of Family Business Council strategies. With many decades of experience, we understand the wide variety of challenges that families face as they work together to build, grow and sustain a thriving family business generation after generation. Through conferences, continuing education programs, family business retreats, speaking engagements and private family business consulting services, Family Business Matters has assisted more than 450 family-owned businesses around the world chart their way through family business issues of all shapes and sizes.
For more information on how Family Business Matters can help your family business survive and thrive, please contact us today at (970) 948-5077.