The family forum and charter: what does the family forum need to consider?

Why hold a family forum?

  • Build a stronger family
  • Build a stronger business
  • Plan for future ownership
  • Plan for family participation in the business
  • Help the children manage inherited wealth
  • Open up the succession process
  • Preserve family values
  • Professionalise the business
  • Manage family/board relations
  • Recognise and resolve conflict.


1. Listen to each other:

  • external
    -  shut the door
    - don’t make calls
    - don’t doodle
    - don’t interrupt, even if you disagree
    - don’t make asides
    - use positive body language.
  • Internal
    - put yourself in the other persons shoes
    - put your own views aside
    - put your own needs aside.
  • verbal
    - ask for clarification
    - ask for amplification
    - summarise what was said
    - useful openings
    - dangerous openings.

2. Listen for what is not being said:

  • understand the motives behind the comment

3. Try to understand each others viewpoint:

  • avoid interpreting for others
  • let the other person finish before passing judgement
  • ask about their thoughts, reasoning, and feelings.

4. Don’t concentrate on the past:

  • learn from it; don’t drag it up, BUT past blockages must be cleared.

5. Don’t wait for the other person to change first

6. Aim for consensus:

  • understanding the ideals of the organisation which make consensus rather than majority rule preferable
  • understanding of individuals constituting the group and their idiosyncrasies
  • deep commitment to listening
  • clear sense of trust in the validity of each members contribution
  • openness to learn from those who may be better informed on a certain matter
  • acceptance that individual knowledge untempered by group wisdom is often very shallow
  • willingness to examine oneself, in particular when a compromise would be the right solution.

7. Avoid making demands

8. Focus on goals rather than on personalities – don’t play that emotional card.

Why have a constitution?

  • Harmony
  • Clarity
  • Avoids conflicts
  • Gives a clear message to family and staff
  • Sets expectations at an appropriate level.

A Family Constitution

  • Family job specifications
  • Performance appraisal
  • Non-family managers
  • Leadership
  • Voting and share ownership
  • Buy – sell agreements
  • Board of Directors and their power
  • Establishment of a family Council if appropriate
  • Communication
  • Ethical guidelines
  • Position of women, and in-laws
  • Requirements before joining
  • Procedure for amendment of Constitution.

Long term goals

What are the family’s objectives?

  • Keep it?
  • Sell it?
  • Float it?

Management philosophy

  • Best interests of the family always first?
  • Best interests of the business always first
  • Combination of both; how will you achieve balance?

Family members in the business

  • What should be the criteria for entry into the firm?
  • Should in-laws be allowed to join?
  • How will the roles of family members be determined?
  • How should family members be remunerated?
  • How should their performance be evaluated and by whom?
  • What if the family members do not perform to an appropriate standard?

Share ownership

  • Should shareholders regard themselves as owning an asset to yield a capital sum in due course, or as custodians of the shares for the next generation?
  • If they are to be a realisable asset, is everyone aware of this and are there procedures for those who want to cash their shares?
  • If the latter, is the company geared to providing income and pension rights instead?
  • How can those who must unlock their shares?
  • Who will be allowed to own shares?
  • Who should have voting control?
  • What should the dividend policy be?
  • What will happen as regards share ownership in the next generation?
  • Should family members who are active in the business be treated differently from those who are inactive?

Management succession

  • What should be the criteria for selecting the next leader?
  • When will the transition take place?
  • What should be done if the choice is wrong?
  • What do the directors want in retirement
  • How can the family help the directors to achieve them?

Relationships within the family

  • What responsibilities do members have towards each other?
  • What is the best way to ensure an atmosphere that enhances mutual respect and support?
  • How should intra-family differences be dealt with?

Other matters

  • Should the business have independent directors?
  • What is their role within the family?
  • How can the family protect the security of loyal employees?
  • What role should the business have in the community?


  • A family council?
  • Retreats?
  • Facilitator?
  • Family constitution?

It will all depend upon a willingness to listen, to compromise; and a desire to make it all work.

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