{"id":500,"date":"2022-05-18T05:05:59","date_gmt":"2022-05-18T03:05:59","guid":{"rendered":"https:\/\/blog.iese.edu\/family-business\/?p=500"},"modified":"2023-01-09T10:07:14","modified_gmt":"2023-01-09T09:07:14","slug":"the-family-council-a-means-and-not-an-end","status":"publish","type":"post","link":"https:\/\/blog.iese.edu\/family-business\/2022\/the-family-council-a-means-and-not-an-end\/","title":{"rendered":"The family council, a means and not an end"},"content":{"rendered":"

Guest contributor: Mar\u00eda Rodr\u00edguez Garc\u00eda<\/strong><\/span><\/h2>\n

Predoctoral Researcher and Lecturer \u00b7 Universitat de Val\u00e8ncia<\/strong>
\nVisiting Researcher \u00b7 IESE Chair of Family-Owned Business<\/strong>
\n<\/span><\/p>\n

\n

The family council as a concept began gaining traction in the 1990s, when consultants and academics highlighted its relevance in terms of protecting the business family\u2019s long-term interests<\/strong> and navigating potential family complexity<\/strong>.<\/p>\n

Under these circumstances, the family council often served as a bridge between the family and business realms<\/strong>, especially as generational leadership changed hands and the connections among younger family members became more numerous and diverse.<\/p>\n

Fast-forward to the 21st<\/sup> century: are family businesses still being served by the family council?<\/strong> Today, the challenges faced by family-owned firms differ greatly from those confronted a few decades ago. Important economic, technological and social shifts have affected group dynamics, leading to a far more volatile, uncertain and ambiguous scenario.<\/p>\n

So how can the family council help?<\/p>\n

The role of the family council<\/strong><\/span><\/h2>\n

The family council brings value to the business family by fulfilling the basic functions of a family<\/strong>\u2014looking after, protecting and educating all of its members\u2014but with an added feature: fostering entrepreneurship<\/strong> in future generations.<\/p>\n

This is important since the family business undergoes a renewal with every incoming generation<\/strong>, which confronts the unique issues at play at that moment in time.<\/p>\n

If the goal of family-controlled firms is to pass on the ownership, management and governance to future generations, specific mechanisms are needed to engage them<\/strong> and ensure they can successfully oversee family dynamics<\/strong> and separate them from corporate matters<\/strong>.<\/p>\n

Protecting both the family and the firm<\/strong><\/span><\/h2>\n

As mentioned in previous blog posts<\/a>, the family council fosters the well-being of both the family and the company<\/strong> by establishing clearer boundaries between both spheres via (1) rigorous criteria and objectives, (2) fixed agenda in meetings, and (3) follow-up and preparation of future meetings.<\/strong><\/p>\n

When these points are met, the business family will benefit from a functional family council that is capable of:<\/p>\n