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The Family Council: Clarifying Boundaries Between Family & Business
Kevin Spafford, CFP®
Any month of the year is the perfect time to review and make plans for the seasons ahead. Compare achievements to intentions and devise plans to finish strong. In a family business, family members fill a variety of roles. Besides a place in the family hierarchy, parents, sons, daughters, siblings, and grandchildren may also be part of the ownership group. As a result, the lines separating family matters from business decisions may cause confusion. Family acrimony may spill over into the business and disrupt operations. One of the best ways to minimize this distraction is to establish a governance structure that clarifies the boundaries between family and business.
A family council provides the governance structure to separate and manage the family’s interests in the business. It speaks for the family and develops the family’s vision for the business. It is primarily responsible for family communications, educating younger members on business values, and maintaining family business relations.
While its make-up, duties, and degree of influence vary from one family business to the other, the goal of the family council is to increase communication among family members and decrease the conflict that often results when family and business matters collide. The council adopts policies and acts appropriately to establish clear boundaries between family and business.
Learning to work together can be a tense walk on a balance beam. For your family meetings, use our “Suggested Ground Rules” to establish a set of guidelines to help ensure productive discussion and positive results. (eLegacyConnect tool available for public access - with no login required - through October 15, 2015.)
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Have questions specific to your family? We’re always happy to schedule a complimentary phone consultation to discuss your family’s succession objectives, review potential next steps, and determine how we can help.
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