A family council is the organizational and strategic planning arm of a family, where all members meet to decide values, policy, and direction. It is the vehicle for addressing and exploring family concerns that influence the business and family.
In most family business, such issues are decided informally and secretly. A family council makes these decisions open and explicit. Many families mistakenly feel that the best way to promote harmony is to avoid discussion of upsetting topics. By establishing a council, a family recognizes that very few issues get resolved by ignoring them.
The council is also an acknowledgement that old-fashioned patriarchy is dead. Father can no longer unilaterally decide everything of importance for the family. More participation, openness, information sharing, debate, and democracy are needed in today’s complex family environment.
A family council provides a means for deciding the business’s role in society; every family is judged personally by what its business does in the community. A council also provides an opportunity to explore how the family uses its wealth and provides for all its members. How will that wealth be passed on to the children? How can the parents live when retired? What portion to the community? What values does the family want to express through the power and influence of its investments?
Article written by Carmen Bianchi of Family Business Associates