Family Business Council
Communication is one of the keys for the success of a family business. Family business council is one of the mechanisms that fosters communication and help the family plan and develop the family business better.
Through family business council, the family creates a platform for open communication to share and evaluate the current performance, develop the future direction and clarify the goals that the family and the business is trying to achieve. When members of the family work together there is bound to be differences and conflicts, hence the family needs to have a mechanism in place where they can table all such issues, have open discussion, understand each other’s point of view and clarify the questions and doubts to avoid disagreements. If the family is clear about the goals and direction of the family business it can contribute greatly to the success of the business as well as the family.
One of the greatest mechanisms for fostering communication, structuring discussion of new ideas and business planning can be done through the development of a Family Business Council. The members of a Family Business Council are responsible for sharing the business performance among family members, highlighting the business dynamics that exists within the business and the family members and making decisions on how to handle issues that arise among family members who are involved in the day-to-day operations of the business.
Resolving Conflict is the Goal of a Family Business Council
The most convenient option for conflict management in most of the family businesses is to sweep the conflict under the carpet, with a view that time will automatically heal it and avoid from addressing it. Over a period, all such unaddressed petty issues accumulate, it builds a sense of ignorance for the family members. Overtime unaddressed issues culminates into larger problems which become difficult to manage. The Family Business Council is tasked with tabling and discussing any such conflicts and is expected to come up with a resolution that can be escalated to the concern business leaders, the board of directors, or the shareholders. In short, a Family Business Council assists the family business in resolving conflicts and planning for a successful future.
It is important to create a forum where business can be discussed and family members can be educated about business matters. This is a gathering place for all family members, whether involved in the business or not.
Who is appointed as a member of a Family Business Council?
Logically it is the elder family members who are not shouldering any functional business responsibility should be part of the Family Business Council. Generally, it is the Karta or the Head of Family or the respected elder women in the family who are most suited to head the family council. It should also include the family members who are involved in the business and are responsible for the performance of the business as other members. A large family may nominate members from each family to represent their fraction of the family
What is in the best interest of the Family and the Business?
A Family Business Council always has the best interest of both the family and the business. The task at hand for the council is very challenging. The members must work together to suggest resolutions to current issues facing the business as well as among the family members and make the them work as a cohesive team.
If your family business is looking for guidance and direction with conflict resolution, having a Family Business Council might be a good way to start.
Does Your Family Business Need Help?
With extensive hands on experience of assisting family businesses, we understand the wide variety of challenges that families face as they work together to build, grow and sustain a thriving family business generation after generation. Through orientation programs, one to one as well as common meetings, workshops, public talks, mentoring, coaching, Family retreats and private family business consulting services, we help family business owners chart their way through family business issues of all shapes and sizes.