Thursday 25 October 2012

Family Assemblies or Forums


Tuesday 16 January, 2001
Families divide responsibility for, authority over, and ownership of their business. Over time, they redefine and reorganise these relationships.
When families fight, it is often over expectations, values and rights concerning the business. When family members have appropriate forums to voice their concerns, conflicts may be avoided, managed or minimised.

As family businesses develop and mature, they increasingly require different structures and policies that balance the different needs of stakeholders and the business. Most family business members do not meet regularly enough to understand these structures, let alone feel as though they are part of the decision making process.

Many family business members meet only on an ad hoc basis and involve only those members who own and work in the business. These groups tend not to keep minutes of meetings, and often fail to make their views regarding individual roles and responsibilities explicit. It is for this reason that conducting regular forums is particularly important for multiple generation firms and mature businesses primarily because these forums provide opportunities for enhancing open communication and discussion of family and business affairs.

Family forums have been described as semi-formal or formal meetings of family members involving multiple generations. These assemblies or forums inform family members of developments in the family business and provide a context for discussion and exchange of important matters, ideas and views. In other words, the family forum is a vehicle by which family members can attend to the business of the family. The forum usually includes all family members over a certain age whether or not they own shares. This group meets at least annually and discussions during the course of the meeting can form part of a newsletter or written minutes. Operating rules for this body are defined in a Family Business Charter.

The family forum is a comfortable learning environment in which individuals are free to express themselves. It is the principal mechanism for exploring and resolving family matters, especially those relating to the interface between family and business. These forums might involve debates, discussions and education. Decision-making relating to the business is left to the family business board. However, there is usually some overlap between forum and board members.

The family forum provides a venue in which family can nurture other family members; helping them develop self-esteem, independence and communication, interpersonal, and business and management skills. The family forum might also review general business concepts, the company’s financial statements, estate planning and other pertinent matters. Family forums provide opportunities for members to learn to work together, discuss different views, discover common goals, create common assumptions, and perhaps resolve their differences and focus on the positive aspects of owning an enterprise.

The meeting should follow a prepared agenda, set time limits and perhaps include outside resources or educators. A family member or facilitator is responsible for chairing the forum, with the leadership changing periodically. The leader makes arrangements for meetings, and coordinates outside resources including speakers and facilitators. Topics are limited to the big picture, trends and significant changes rather than matters relating to the day-to-day management of the business which are the prerogative of the management team.

In contrast, the family board (for smaller companies) or board of directors (for larger firms) dispenses with the business of the business. A family board might deal with issues pertaining to how family members get hired, evaluated, compensated, and treated. These matters go beyond the usual considerations of the board of directors.

Families can establish clear boundaries between family and business, create structures to manage different stakeholders’ divergent interests, and establish and clarify relationships. These issues can be addressed in family forums and comprise a critical component of the succession planning process.


Source:ceoonline.com

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