Family Business Council
Communication is one of the keys to the
success of a family business. Family business council is one of the mechanisms
that foster communication and help the family plan and develop the family
business better.
Through the 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 are bound to be differences and conflicts, hence the family
needs to have a mechanism in place where they can table all such issues, have
an 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 exist
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 family businesses is to sweep it under the carpet, with a
view that time will automatically heal it. Over a period, all such unaddressed
petty issues accumulate. Overtime unaddressed issues culminate into larger
problems that 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 concerned 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 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 in
assisting family businesses, we understand the challenges families face as they
work together to build a thriving family business generation after generation.
Through orientation programs, one to one and group 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.