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A Better Partnership


Mar 2004
March 05, 2004

Using Family Meetings In Your Family Business Succession Plan

As families grow, the members grow up, ownership in the family's business begins to pass to children, in-laws, and grandchildren, and the dynamics of the family and the family's relationship to the business changes. Upon reaching adulthood and with the passage of ownership comes the desire and right to have a say in the conduct of the family’s business, whether one works there or not. In addition, as families grow through the addition of in-laws and sometimes step-children, even if these persons do not have an ownership interest in the business, these additions to the family exert subtle and not so subtle influences on the thinking and conduct of the members of the family working in and owning the business. One way families learn to manage these changing dynamics is by incorporating family meetings into their family business succession plan.

The Benefits of Family Meetings

Family meetings offer numerous benefits to the family. Three of these benefits are opening lines of communication, providing a forum for resolving conflict, and communicating family values to subsequent generations.

  • Opening Lines of Communication – By having regular family meetings to discuss the business, families have an appropriate forum in which to share their views about the business and to receive information regarding the business.

  • Conflict Management – Regularly scheduled family meetings offer an opportunity for family members to voice concerns and resolve conflict before the tensions can become so great that the conflict threatens the existence of the family business or the family.

  • Passing Family Values – Family meetings also offer an opportunity to pass along the family’s and the business' history, culture, and values to the younger generations.

What are Family Meetings?

Family meetings are generally open to all members of the family over a certain age. Although sometimes combined with shareholder meetings, share ownership need not be a prerequisite to participation in the family meeting. Family meetings often include in-laws or step-children who may not actually own an interest in the business. Families usually set a minimum age for participation in the meeting, and reaching the minimum age marks a rite of passage into adulthood for the teens or young adults who are invited to their first meetings.

Meetings are typically held once or twice a year. They are best conducted with an agenda. Using an agenda ensures the time spent is productive, keeps the leaders and participants focused, and ensures meaningful discussion and action occurs. Usually the agenda includes an update on recent developments involving the business, its products and markets, its leadership, and progress concerning the succession planning. This portion of the agenda offers an opportunity for members of the family not active in the business to learn how the company is doing. Involving non-family management and directors can provide an opportunity for family members to take their measure of company leadership and to share their views and concerns regarding the business with those managing it.

Family meetings also offer a chance for family to share "family" news, such as a child’s decision on which college she will attend and to celebrate individuals’ achievements. Finally, family meetings often will include some "fun" time. Some families choose venues for the meetings specifically designed to make it easier for family members to have time to interact with other members of the family they see less frequently and to offer opportunities for fun for all.

For families with little history of holding family meetings, initial efforts should have modest agendas and goals. Families holding their first meetings also might benefit from retaining the services of an experienced facilitator or family business advisor who can assist in setting the agenda and conducting the meeting. This is particularly true if the business is undergoing stress, there is a history of family conflict or there are long suppressed tensions.

By holding regularly scheduled family meetings, families owning businesses can strengthen their families, the business, and the succession planning process.

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