Family Business – Family Meetings

Probably the most common problem I hear from the family businesses that I work with is, “we never talk.”  Why is this?  Is it because they have nothing to talk about?  Is it because they have some bigger family issues or history that prevents open communication inside the business?  Is it because they have no meeting structure or ground rules in order to have a safe open dialogue?

 

It is estimated that 90 percent of family owned and managed businesses do not have regular family meetings.  It takes a fair amount of effort to plan, coordinate schedules and deal with everyone’s varied agendas.  Are these family business meetings really worth the effort?  Absolutely yes!  Research has shown that holding regular family business meetings turns out to be one of the three keys to a successful family business (the other two are: regular business planning and effective governance).  Those families who hold regular family business meetings have discovered that among the many benefits are building a stronger and more cohesive family as well as a healthier organization.

 

A family business meeting is an opportunity for family members to come together on a regular basis to discuss issues of interest to those family members involved in or who have an interest in the busi­ness. These meetings are to determine long-term plans for the operation and management of the business. Some families will hold these meet­ings as little as once or twice a year, while others choose to meet on a more regular basis.  If a family business is be healthy, the members need to have open dialogue in a structure that allows free flowing communication and problem solving without personal attacks.

Here are 15 key questions all families need to be able to discuss and answer:

1. Are we committed to the future of our family business?
2. Are we obligated to work there indefinitely, or may we pursue other careers?
3. How do we decide which family members will be employed by the company? What about in-laws?
4. What education or work preparation should be required of family members who work in the business?
5. How should we evaluate and pay family members who work in the business?
6. What should we do if a family member doesn’t perform, or leaves the business?
7. How and when do we select the next leader of the company?
8. Should we have an advisory board? Who should serve on our board? Family members? Employees? Our outside advisors? Others? 
9. Who should own stock in the business?  Family members that do not work in the business?
10. What do we do if a family shareholder wants to sell out? 
11. How do we teach in-laws and younger family members about the values and traditions of our business and our family?   
12. What do we do if there is a divorce in the family?  
13. How do we protect the contributions of unrelated key employees?
14. To what extent do we involve key employees in family disagreements?
15. Could one key employee be the next leader of our business?

These are challenging questions and require each family business to have regular meetings to discuss these issues.  If you would like more information about holding family meetings, please contact me for a planning checklist.

Comments

[Shane Eloe]

I don't see a good reason why a family business would not be having these meetings and discussions on a regular basis. Would they avoid these issues if it was not a family business?

Incentives, competition, and succession seem to be themes running through these issues. These are key issues for any business that intends to be a long-term going concern. This is very prudent management and an excellent list of issues to bring to the family business meeting. Thanks for your insights.