An Invigorated Family Council
30th March 2016
If you have a family council, or are thinking of creating one, the following will help you to keep it being a vital and valuable part of your governance.
The evolution of a family council
In the beginning a family council is often swept in on a tide of pride and enthusiasm. Sometimes mixed with a sense of relief that the family has at last modernised its governance.
By creating a family council you are now among the innovators in the family business world. Meetings are well attended, papers are read and actions are followed up, as was hoped and expected.
However as some families have experienced, and as others will want to avoid, the tide then ebbs. There are 2 reasons for this that you might not have thought about.
Too many verbsThe purpose of the family council is often described as being to facilitate or enable or encourage, things to happen. For example, encourage the next generation to learn about the family business by arranging events to enable this to happen.The family council then organises what it considers to be a wonderful education programme, but the audience does not respond as hoped, and consider the offering dull, unworthy and boring.
If all the family council’s encouraging and facilitating is met with indifference, the council members might say ‘but we did our job’- we organised- while other stakeholders start to question, ‘why do we bother having a family council?’. And in this way good people start to become demoralised.
The problem is the use of too many verbs in describing the purpose of the family council. It can facilitate, encourage and whatever to the best of its abilities but it is at risk of failing to achieve an uncertain overall outcome and is thus condemned to eventual marginal irrelevance. The solution to this problem comes later in this article.
Representation and volunteerism
How do you decide who is on the family council? Often the answer combines:
1) the need for some interests (like family branches or different generations) to be represented on the council; with
2) who has the time to take on what is often an unremunerated role.
But what about ability, experience, and competence? If representation and volunteerism are considered more important than ability etc., then expectations of what the family council can achieve need to be adjusted accordingly.
Solving – or avoiding – these problems
The solutions are:
1) Express the purpose of the family council more clearly by avoiding the use of too many verbs.
2) Then decide who needs to be on the family council in order to deliver the purpose.
Family council purpose
The purpose of the family council should be expressed as achieving a desired end or outcome.
To take the earlier example, the desired outcome could be a family group who understand the family business.
If that outcome seems too broad, it can be refined until the appropriate level of detail has been achieved. For example the outcomes could be that the family:
When the purpose is clearly expressed as a desired outcome or end point - with the noted absence of troublemsome verbs - the family council should be left to get on with achieving it in whatever way they see fit, subject only to 2 constraints that are the responsibility of the board.
1) What budget does the family council have to achieve its purpose?
2) Are there any things that the board want to ensure the family council does NOT do. For example the board might want to make clear that the family council must not comment publically about its role or the business.
When the purpose of the family council is expressed as being to achieve a desired outcome, it is easier to decide who needs to be a member in order to achieve it. There might still be a need for some interest groups to be represented, but everyone who joins will be clear what is expected of them and how they will be held accountable.
And that is how you invigorate, or reinvigorate, a family council.
Carver, J. & Carver, M. 1996a, Basic principles of Policy Governance, Jossey-Bass, San Francisco.