editing disabled

Family meetings are structured opportunities for family members associated with a family business to discuss personal hopes and concerns regarding the business and potential roles in the business. Family meetings can also be an opportunity for the family to come to agreement on issues which can then be communicated to the board of directors or senior management. In a more structured form, family meetings can become a family council.

Reasons to conduct family meetings

There are many benefits to having a family business meeting. It is an opportunity to teach ownership and responsibilities to the family members in a more formal and unassuming way. If done right family meetings can help strengthen a business and a family. It can create unity and can diminish problems from carrying on by offering more communication, which can in turn establish the family business continuity.
  • Family meetings help involve the whole family together by having an open environment to share ideas, problems and solutions. It can be a great way to set aside time to re-establish how the business is going from each family member perspective and specific job in the business. This helps to keep everyone involved and keeps the business running smoothly. It helps provide opportunity for family members to share any frustrations or successes they have experienced.
  • One of the most important parts of the family meeting is that it can create a sense of vision. The family meetings can be a time to discuss the family business plan and to establish if the business is staying on target of that vision. The family meeting is often where owners may try to stabilize the balance between management, ownership and family.
  • While a board of directors and board of advisors may be in place, the family meeting can be a time to discuss the family’s will, “family employee compensation, dividend policy, liquidity arrangements, transfer of ownership or the decision to sell” (Poza, 2006, p.251).
  • Some family business have family members working for the business from a distant location or only for minimal tasks. The family meeting helps to bridge that gap in communication and day to day operations by providing those family members an opportunity to hear about financial status, management, challenges, changes and strategies going on inside the business. Learning and sharing about a business success can also help motivate and create pride in family members in their various roles.
  • Other benefits for having a family meeting include the opportunity to share about the business’s history and values to the younger generation. One way to bring in a new perspective into a meeting and to professionalism it is to invite repected non family managers to attend as “resources, teachers and mentors” (Poza, 2006, p.253). They can provide advice that may prove highly beneficial to a family business.

Conducting a family meeting

Before holding a family meeting it is helpful to lay out a plan that will be discussed. For example, the three main issues, family, ownership and management may be broken down into various topics. Ownership issues may include dividends, a shareholder meeting, the estate plan and family strategy. The family issues can range but may include policy making on family employee hiring, preserving family peace and creating an efficient atmosphere. The management issues could be the up to date financial results, family member and non-member compensation, and an update on company strategy and succession planning (Poza, 2006, p.255).

References

  • Poza, E.J. (2006). Family Business 2nd Edition. South-Western College Pub.

Further reading and external links



Article contributors





This article is a stub. You can help Family Business Wiki by expanding it.

Categories: Family governance