In family-owned businesses, governance can become a significant source of conflict and frustration. Those businesses that survive the transition through the generations will have a clear and agreed-upon plan for governance that leads to effective decision-making and increased family harmony. This is also an opportunity to capture the history and legacy of the founder generation, ensuring that institutional knowledge can be passed from generation to generation.
A business that is truly achieving excellence will ensure the following are in place:
- Methods and documents to support communication and information sharing. This could include a Family Council, a Family Charter, a Sibling Management Agreement and additional documents that reflect the philosophies and values of the family as they either actively or remotely manage the family business.
- Training and agreement in ways to manage conflict and improve communication, negotiation and decision-making.
- A process for setting compensation, managing performance and setting the strategic direction when appropriate. This might include the development of key policies and/or the setting up of an advisory board.
- A way to effectively manage family wealth and wealth planning. Ensuring appropriate communication, access to information and professional investment planning.
- A way to capture and celebrate the history and legacy of the organization and the family.
At EisnerAmper, we are experts in developing the polices, protocols and practices that can increase communication and family harmony, while ensuring that the family enterprise remains healthy and productive. On the following pages, you will find a host of resources and ideas to help you and your family begin to explore the world of family governance. Please call us for a no-obligation conversation to learn how we can help you to develop this important foundation to intergenerational family-business success!