The family council is the ideal forum for owner families to reach consensus on the core decisions regarding their business. It is the preventive mechanism par excellence to analyze, discuss and debate critical issues, and make solid decisions based on shared criteria and commitment.
In this way, family councils serve as firewalls, preventing conflicts from bubbling over into the shareholders’ meeting that could undermine the firm’s stability and long-term sustainability.
So how can family councils create the framework of trust necessary to achieve this aim? The answer: improving communication, with the following seven insights as a guide:
1 – Maintain a positive attitude
Communication is a two-way street and attitude is everything. It’s important to be friendly and positive, and not shy away from speaking up.
In one family council meeting, I began jotting down ideas on the whiteboard out of pure habit. Fortunately, one of the founder’s sons spoke up and politely suggested I refrain from doing so, since the whiteboard was the exclusive domain of his father.
2 – Never assume
Ask, listen and learn. A few days ago, a business leader shared he was more concerned about what people had not expressed in family meetings than what they actually said.
3 – Share the same information with everyone at the same time
Another family-business leader recalled a dinner out with friends, who congratulated him for his company’s recent product launch. He was hearing about it for the first time, which put him in an awkward situation.
After expressing his discomfort at the next family council meeting, they decided on a new protocol: from then on, every family member would be notified of new products at the same time and receive samples at home before their launch.
4 – Create a common language
Information without instruction doesn’t become knowledge, which is why proper training is key to make sure everyone can understand and internalize relevant company information.
A non-family CEO once confessed to using the company’s lack of training and common language to his advantage. In his meetings with the owner family, he would inundate them with facts, figures and reports in his meetings, and since they usually didn’t grasp the information presented nor ask for clarification, his proposals were always given a green light.
5 – Foster transparency and truth
Get rid of hidden agendas and taboo topics. When working with a third-generation family business, I was told some issues were off-limits for discussion. After gently prodding and digging a bit deeper, it turned out that these were precisely the issues that required resolution in order for the firm to “start over with a clean slate” and move forward.
6 – Manage emotional aspects
Avoid judging people and form your opinions based on their actions. More than once, I have seen the negative effect when “labels” are assigned to certain family members or even to entire family branches.
7 – Do not improvise
As Winston Churchill used to say, “I’m just preparing my impromptu remarks.” Surprises are a formidable foe, so don’t be caught off-guard. Be sure to plan and prepare meetings with rigor and formality, with agendas and minutes.
This is something else I’ve witnessed in family councils: the easiest way to derail these meetings is to bring up a fact or issue that isn’t on the agenda. In these situations, people react on the fly with offhand remarks and uninformed opinions, often grounded on emotional biases.
Communication among all family members is the “software” of the business family. Without it, the best “hardware” – rules, agreements, systems and protocols – won’t function properly.
Yet it’s important to note that the road to enhanced communication isn’t paved on its own: it requires applying the values of respect, humility and generosity, and professional guidance to ensure it’s easy and not bureaucratic. Communication should be recurrent, not reactive, and efficient, with decisions founded on relevant criteria.
By improving communication, the family council will be better equipped to build and define a single voice as a business family. In addition to promoting organizational stability, it also improves the quality of relationships within the family, and in turn, its well-being and happiness.