For many families, the way to get started is to focus on a specific goal in an area that is likely to be non contentious. For example, most families at the stage of employing non family in senior management positions would see the benefit of having a policy covering “Employing and Remunerating Non Family” and few could question the wisdom of improving “Communication” or clarifying the “Role of the Board”.
In our experience, once a family gets the process under way, the relief of understanding why relationships may have become strained (and what can do done about it!) plus the benefits of “getting organised” soon outweigh concerns over sensitive issues and very quickly the momentum for change builds. As the FBS process ensures that bespoke solutions are developed by the family themselves to resolve their issues, ownership remains firmly in their hands.
Listed below are topics that can form the basis of a piece of work to get a family started. For more information on any of these topics, contact FBS either by phone or submitting contact details requested in the “What next?” panel.
A report that identifies and evaluates the strengths and weaknesses of all the existing formal and informal governance structures and policies in the family enterprise
An agreed statement, based around the Mission, Values and Vision of the family, describing why they want to remain connected through their family enterprise. The process used by FBS ensures that the outputs truly reflect what the family stands for and avoids the tendancy for a statement of values to be a bland list of words with which no-one can disagree.
A policy specifying the overall ROI in a family enterprise that identifies and balances financial returns with the “other “ returns that the family feel worthy of their endeavours (family careers, benefit to the community, maintaining a legacy etc)
A policy governing who can be an owner (eg spouses, blood line only, non family etc), the rights and responsibilities attached to ownership and dealing with the transfer of ownership, including setting a price and the rules for voluntary, compulsory and permitted transfers.
A policy identifying decisions that can only be made by owners and which are not delegated to the Board and how these decisions will be reached.
Providing impartial and objective advice and help in a situation (often emotionally charged) where family members want to sell their stake in the family enterprise.
As ownership expands over generations the need for help to establish more formal communication structures and processes and how to use them becomes a priority.
A policy constituting the Assembly and/or Council Shareholders’ Assembly – A forum that all owners are entitled to attend to receive and review ownership information and possibly to make “Decisions reserved for Owners” Shareholders’ Council – A smaller representative body that organises the Assembly and who may be granted authority to represent the interestsof the shareholders in the wider governance of the family enterprise.
A policy constituting the Assembly and/or Council Family Assembly - A forum for family members usually for social, educational and sometimes formal purposes. Family Council - A smaller representative body that organises the Family Assembly and who may be granted authority to represent the interests of the family in the wider governance of the family enterprise.
A policy governing recruitment training, career development and remuneration of family members
A policy governing recruitment training, career development and rewarding of non-family members. (Managing concerns over nepotism, considering alternatives to share options as an incentive etc)
In situations where there are working and non-working owners, a policy that balances objectively the needs of the business with the expectations of shareholders can be invaluable.
Polices governing areas of importance to the family; such as education, philanthropy, new ventures and media.
Review the current role and effectiveness of the Board and making recommendations to enhance its performance. Areas covered may include clarifying the difference between ownership and governance, membership of the board (including the role of non-execs), remit of board committees, schedule of matters reserved for the Board’s decision.
Backed up by our own experience has demonstrated that each major transition/succession must pass through distinct stages and if any stage is ignored or not managed well, the transition will either falter or be unsuccessful. The stages are Preparation, Disengagement, Exploration, Choice and Implementation and it is strongly recommended that impartial advice is taken to assist the family through what is inevitably an emotionally charged and difficult process.
A flexible document that can record the overall governance of a family enterprise including the individual policies separately identified above
Educate the NXG to have a better understanding of the system of which they are a part and to ensure that they are well prepared to • Consider a career in the family enterprise • Be a responsible owner
Help for individuals in a family enterprise to work towards achieving their life aspirations and to discover whether a role in the family enterprise will suit their own strengths and ambitions. Can be as an informal sounding board or a planned partnership that is focused on helping clients to reach set goals over a specific period (e.g. retirement; deciding whether or not to join the family enterprise).
As a company develops, grows and matures, it is inevitable that the way in which the organisation is structured, managed, governed and financed needs to change. Recognising this and then tackling it is challenging for any company – for family businesses, the added complexity of family ownership and governance makes the case for external facilitation almost a given.
FBS Services are designed to help create the structures and practices needed to achieve best practice in governance of a family enterprise, whatever its economic activity, diversity, size or complexity. These services cover all dimensions of family enterprise governance and apply the FBS Consulting Process, which gives clients peace of mind that a consistent and thorough approach is taken to whatever we are asked to do. Each client can choose to do as much or as little work as is possible and desirable at a particular time, knowing that any future activity will always integrate properly with the previous work.