Last week we talked about some reasons that your family business might need a Family Business Council. This week we’ve put together some information about how to get your Family Business Council up and running! Using these tools, combined with a little expertise from our firm, you will be in tip top shape in no time.
First, let’s just summarize a few facts about Family Business Councils:
A council is advisory. It isn’t in place to drive business or create policy. It exists to give family members the opportunity they need to share their ideas and concerns, and then pass those on to the board of directors.
It’s a democracy. It is a fair environment where every member is valued, and majority rules. It isn’t a hierarchy, or an extension of business roles and positions.
The Family Business Council can include family members who aren’t otherwise involved in the family business. You’ll define the “who can be part of the Family Business Council” when you’re getting it started, but just remember,members don’t have to be employees of your family business.
Here’s what you need:
- At least 5-9 family members. If your Council gets too big, nothing will be decided.
- One member from each generation. Keep it balanced – you don’t want all the parents and uncles together with one lone voice representing “the younger kids”. It’s not fair to either side, and can result in problems.
- A chairman. This person is the main contact and manages the meetings. Ideally, this is someone objective (such as an advisor or outside expert).
- Plan meeting structure. At a minimum, you’ll want to review your purpose (why are you in business) and if you should still be in business, performance (are you profitable and achieving your goals), and problem solving (addressing family grievances or making decisions on family matters)
There’s far more to this – there’s even an entire book on “How to Create, Run, and Maintain a Successful Family Business Council”
We can’t express enough the value of having a professional business advisor help you through the process of getting your Family Business Council started.
The truth is, if you don’t have an expert holding your hand through the process, it is extremely likely that your “council” will quickly become glorified family dinners, or hangout nights, or, sadly, explosive gatherings. But someone who knows the lay of the land can help you get through the formation and development of your Family Business Council so that you will find more success as a council and as a business!
When you’re choosing an advisor to help you get started, be sure to consider someone who has professional experience with Family Business Councils, someone who is organized and has knowledge of meeting procedures, as well as simply understands family dynamics. That’s the kind of person who can give you a professional, objective perspective, with enough grace and humor to make the journey a great experience.
Your first meeting.
Your first meeting will be an opportunity for you to run through the formalities of a council meeting. Many people have never been exposed to things like Roberts Rules or even how to stay on task in a formal meeting space. At your first meeting, your advisor can help get the discussion going, and guide the family through the process of discussing things like the vision for the Family Business Council, the importance of writing a constitution, and even listing some guidelines. (You can also use this time to work through the questions we mention above, in the “Here’s what you need” section.) Someone will need to take notes, to provide minutes for the following meeting and future records.
Prepare for the next meeting.
Your members will very likely come away from that first meeting with mixed feelings of exhaustion, elation, and possibly a little bit of frustration. (That’s okay, that’s why you have someone like us involved!) Your advisor will help you get through any tasks and responsibilities you’ve decided on in between meetings. In addition, he or she will be there as questions emerge regarding that awesome constitution you’re working on by now.
Your second meeting will be even easier.
You’ll come to it with more clear expectations, you’ll have discussion to pick up from the last time, you can work through the values and constitution and any other things you decided on. By this time, also, you’ll be starting to discuss the things that you want to suggest to the board. And, again, your advisor will come in handy as you work through priorities and proper communication strategies.
As your Family Business Council evolves, your entire business will become more stable, will be a more positive environment for all family members, and you’ll truly be positioned to reach your potential. (Not to mention how impressed the board will be at your initiative and how professionally you’ve handled the whole process!)
As you can see, the steps aren’t too complex, but this is a pretty big undertaking. Please contact us if you have questions about whether or not a Family Business Council is right for you, and let us come alongside your family business and help you reach the next level of success.