How to create a family council - family-owned business management - includes related articles

Nation's Business, June, 1992 by Dennis T. Jaffe

The council is the focal point for developing and implementing three types of planning:

* Individual plans that help each member of the family determine his or her own goals and balance the needs of each with the family's and business's needs;

* Family plans, in which participants determine the overall goals of the family and the resources needed to achieve the goals;

* Business plans, which address such issues as ownership and management control, family involvement in the business, and strategic direction.

The best way to start a family council is away from home at a retreat lasting a few days. Going away underscores the special meaning of the event and gives family members a place apart from everyday pressures and time to reflect on their thoughts and feelings.

The convener needs to do much more than just set a time. People want to know what will happen and what they are expected to do. They will probably be somewhat anxious or concerned about what can be said and the possibility of unresolvable conflict. The retreat should not be a presentation by an expert, nor simply a recitation of Dad's plans for the business. It is a participatory gathering. Each individual needs to prepare, and everybody needs a chance to contribute to the agenda and the ground rules.

Start with a planning group. If the family business consists of only one family of parents and children, the planners can be the whole family. The planners draw up objectives and gather information from other family members. They listen to concerns and ask about issues that need to be addressed. Larger families send around a survey and collect written responses from each.

Every family member over a certain age should participate. Children from 12 to 16 are often not included, but in my experience, they are often curious about the business and are beginning to think about their future. So make them welcome.

Sometimes members from far away, or those who feel distant, are reluctant to participate. They may feel that the council is an attempt to force them to be "closer." They need to be reassured that what is being asked for is their caring and respectful participation in a forum to discuss common issues.

For the first retreat or two, most families have found it useful to have an outside person, such as a family-business consultant, as a "facilitator." This individual is in charge of the process of the meeting, making sure that the meeting keeps flowing, that every individual gets to contribute, that people listen to one another, that one person doesn't monopolize the discussion, that the conversation stays in focus, and that what is said is recorded and preserved.

I suggest that by the third meeting, the family take on the role of facilitator, rotating it from one family member to another at subsequent meetings. The facilitator takes responsibility for coordinating planning, setting agendas, helping focus and coordinate the meetings, and following up. The facilitator role is a great teacher for developing heirs and for family members who want to get more involved in the family's business.