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Family council refers to family members, or a subset of family members which represents the family, discussing and deciding issues which overlap the family and the business such as: employment of family members; ownership by family members; voting rights; and valuation of shares. (A written description of the family's position on these issues may be included in the family charter or the family mission statement.) Family businesses differ regarding whether members of the family council need to be: owners, employees, or blood relatives rather than in-laws. A family council is a more formalized version of family meetings.

Reasons to create a family council

A family council offers a structured opportunity for family members to:
  • learn about the rights and responsibilities of family members in a family business
  • provide an opportunity for family members who are not part of the business or ownership of the business to voice their perpsectives
  • discuss issues related to the family or business without interfering with traditional family get-togethers such as holidays
  • develop a "shared vision" and document this in a family plan

Compostion of the family council

While some family coucils include only family members who are active in the family business, most family councils also include family members who are not active in the business (e.g., siblings and spouses who are not active in the business). (Leach & Bogod, 1999).

Topics addressed by the family council

A family council can address issues such as:
  • the family vision and values
  • employment of family members in the family business
  • education of family members regarding the family business
  • family code of conduct (Lansberg, 1999).


Further reading and external links

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Categories: Family governance