• Shared Values
• Shared Power
• Traditions
• Willingness to Learn and Grow
• Activities for Maintenance of Relationships
• Genuine Caring
• Mutual Respect
• Assist and Support One Another
• Well-Defined Interpersonal Boundaries
• Trust

• The transfer of ownership of stock
• The transfer of management responsibilities
• The transfer of authority
• The transformation of relationships
• The transfer of knowledge

• The transfer of authority is about transferring the responsibility for final decisions.
• The transformation of relationships is about the structures that are created to share and exercise this authority.
• The transfer of knowledge is about the ideas that make things work, define who you are, and explain why you do what you do.

• The separation of authority from ownership and management
• Issues of unfairness in the successor generation
• Absence of a shared sense of purpose
• Communication problems
• Lack of formal structures and processes that manage decision making
• Neglect of individual, family and organizational development

• The competence of their successor
• Their own fear of life after “letting go” of the business responsibilities
• Conflicting advice from their advisors
• Incompatible or poorly defined priorities
• Accuracy or “shelf life” of advice they receive
• The effect of business decisions on the family and visa versa.
• How to prepare for a future they cannot predict

• The number of decision makers and stakeholders
• The complexity of the asset base
• The congruence of thinking among the stakeholders
• The “fit” of the company in their market niche
• The level of trust among stakeholders
• The level of competency of key managers and owners
• The level of communication skills among key participants

• Authority in family businesses is not necessarily based on ownership or formal management responsibilities.
• The real issues about this need to be discussed.
• Technical solutions and contractual agreements will not control serious family dynamics.
• Family issues need to be addressed directly.
• Influence is based on maneuvering room and access.
• People are drawn to clarity and a calm leadership.
• You will almost always hurt your business if you use it to control a serious family problem.

• To define the core purpose of the asset base
• To train the next generation of stewards
• To define the limits of family involvement in the business
• To coordinate the development and education of the family as owners
• Many families draft a Family Charter to guide the Council

• The purpose, goals and values of the family
• Guidelines that anticipate predictable “tough issues”
• Defines how the Council will support continuous development and education of family members
• Creates a context that fosters harmony
• Establishes policies and plans regarding family assets

• Create a Family Council
• Create a real Board of Directors
• Create a stewardship development plan for the family
• Draft a Family Employment Policy that defines: (a) Who can come to work for the family business; (b) The education and experience that will be required of family members in management positions; (c) Provisions for accountability.
• Draft a Family Compensation Agreement that sets policies and practices for paying family members who work in the business.
• Draft Shareholder Agreements which are the documents that contain the understandings and policies concerning ownership rights and expectations, and policies for ownership transfer and major policy decisions.

Family Firm Institute
Family Office Exchange
Family Business Magazine

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