Family
Family Assembly and Family Council
Since the interests of a family can never be left out of a family enterprise, there will always be a forum in the overall governance of an enterprising family where their interests and concerns are discussed. In a small family enterprise these important discussions usually occur spontaneously, whenever needed (who will join the business, how will ownership be distributed), but as a family grows this informal governance needs to be replaced by a Family Assembly.
A Family Assembly is very flexible, which makes it important to define clearly what the Family Assembly is there to do. The absence of clear goals will result in ambiguity about the role of the Family Assembly and makes it virtually impossible to evaluate whether or not it has been successful. The goals might be:
- To generate the type the social interaction among a growing family that helps to create and sustain the “glue” that binds the family to each other and their investment.
- To formulate or comment on Family Policies, and make important decisions to implement these policies?
- To educate and inform the wider family, including the next generation, about the structures that will have an effect on their lives and the roles and opportunities that the family enterprise can offer them?
- To undertake specific projects such as creating a family history.
Any formal power of a Family Assembly has to come from the owners. On occasions the owners may accept that since certain matters will affect the wider “family”, (for example, Family Policies) the Assembly should have an input to them, which could range from the right to be consulted through to the power to approve the original policy and any subsequent changes.
The decisions taken about the goals to be set for the Family Assembly and the power or influence it can wield, will be affected by membership of the family assembly. Each family has to decide ”who can attend” which will be influenced by the family’s view on matters such as the role of spouses and the age at which family members are felt to be mature enough to participate in a family assembly.
The size of a Family Assembly may make it necessary to elect or appoint a Family Council to organise the Family Assembly and to be the main conduit for communication between the Family Assembly and other governance structures in the enterprise, for example the Board and the Owners’ Assembly.
