Welcome to the Bottom Line Top Line Podcast with Carol Bartlett, Jol Hunter, and Chris Spurvey.
In this week’s podcast episode, we discuss the importance of family councils for family-run businesses, how such a council can benefit the performance of the business, and some tips for maintaining open dialogue among family members.
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Setting Agendas for Family Council Meetings
To fully engage the council members, meeting agendas should be fresh, dynamic, and interesting.
Particularly when multiple generations are involved, no two agendas should ever be the same. But the agenda should always relate to the family council’s purpose—the value that you expect to gain from the council’s existence.
The Importance of a Family Council
You should set clear rules for your family council—both its purpose and how it will operate.
These rules must be set up early and with input from not only members of the family but also non-family who are leaders in the business. The point is that everyone have a solid understanding of the council, including what to do when something unexpected happens.
What if the business’s leader gets hit by a bus?
I’ve worked in the leadership of family-run companies, and the senior executive and I weren’t allowed to travel on the same flights. We weren’t allowed to go to the airport together. Those are the types of procedures that the family and the Board of Directors put in place to secure a smooth leadership transition if the worst happened and the flight crashed.
What Makes Family-Run Businesses Different from Other Businesses
In a typical business, senior management reports to a CEO, the CEO reports to the Board of Directors, and the members of the Board report to the owners.
In a family-run business, senior management may be owners or members of the Board of Directors. The CEO may be an owner, a member of the Board, or neither, and he or she may or may not be a member of the family.
Given these potential complications, the way in which family-run businesses report to their owners and other stakeholders may differ from other businesses. For example, the head of the family may work for the CEO if that approach is best for the business.
To learn more about these topics, please listen to the episode.
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