The Benefits of a Future Focused Family Council
Creating a Family Council can be extremely beneficial for a family business. Whether the council is initially formed in order to manage succession plans, or it is set up with the intention of developing the next generation, the key is to always have a focus on the future.
Family Council responsibilities
Separate to the Board, the Family Council manages business matters that impact the family and has input into specific family issues. Often, it will be the responsibility of the Family Council to oversee communication between the extended family and the business – especially if there are complex issues involving the two.
Whilst the council can assist in managing current business or family matters, it is also the perfect organisation to recognise, build and develop skills of individuals in line for advancement into the company. There are significant advantages and opportunities with this system as the council members are naturally more aware of personal aptitudes within the extended family.
A regular private business does not have the ability to support new and upcoming talent to the same degree. There’s no immediate access to the next generation of employees in order to nurture skills and develop knowledge and understanding of the culture within the business. Family Councils can help a business be prepared for the imminent future with a motivated talent pool already on hand.
Identify and promote talent
Simply put, an effective Family Council can provide future focused mechanisms to identify and promote talent in the wider family. For many family businesses, the Family Council is the seedbed of all innovation and entrepreneurship across the family and the business.
Family Councils that are future focused provide:
- Clear ground rules and expectations to all family members who want to be involved in the business. This includes understanding what they need to do and demonstrate in order to be part of the business. This very quickly identifies family members with the necessary talent and drive, whilst also being merit based. Individuals know the steps they need to take, what they need to study and what the rules and expectations are if they want to be involved.
- Funding and support for family members for university or college to study specific courses that the Family Council know will benefit the business.
- Opportunities for family members to present new and innovative business ideas for consideration. Some Family Councils provide seed funding as well as retaining a percentage ownership with the right to buy or sell shares in the new venture.
- Co-branding of new business initiatives to help start-up businesses.
- Advice, equipment and logistics to start-ups at low cost to reduce initial financial outlays.
- Business mentoring from senior family members.Several prominent family businesses that Family Business Central works with use their Family Councils as we’ve outlined and have all enjoyed significant benefits for the individuals involved as well as the business entity.
For information on how to set up your Future Focused Family Council, visit Family Business Central at www.familybusinesscentral.com