We’ve been told that good governance in business families is a central pillar to ensuring a long lasting family legacy, generation over generation. Having robust governance structures aims to help families meet regularly, align on key issues, better understand their roles and management responsibilities and express their individual points of view. It’s a locked and loaded, sure fire way to build family unity…..or is it?
A common starting point for good family governance are family charters or constitutions. Essentially serving a similar purpose, conventional wisdom points to these documents as serving a purpose of setting expectations, sustaining family business success, providing a blueprint for a successful leadership transition, and building family connections…but does it really do that?
Look, good governance is very important, but we believe there is work that needs to happen first, in order to make best use of these agreed upon governance structures in business families. Namely, ensuring all family members feel emotionally safe to share and have the conversations that the family needs to have, and are probably avoiding.
In most of the charter and constitutions we’ve seen our family clients develop prior to engaging with Veritage, it would be more apt to refer to them as a template. Stop me if you’ve heard this before: The Charter helped us form a family council and we meet once a quarter for an hour so we are aligned on all matters or we have a governance plan for the transition so we’re ready to go. There is a misconception that good governance automatically delivers family success, unity and cohesion. It doesn’t. What does effectively deliver this is collaborative work, listening to each other, a dose of empathy and sharing of the family members’ feelings inside these structures in a safe space, where everyone can speak their truth and represent their experiences.
It doesn’t matter how many times a day, week, month or year you meet as a family, if you don’t have the common understanding of emotional safety, well…..have you ever seen a mouse on a wheel?
If you see your family in these words, know that you are not alone. Rightfully, you may be asking yourself, so what do I do now? Outside of getting in touch with us, ask yourself a few questions: Are we living the values that we espouse as a family? Are our governance structures creating more unity or more mistrust?
So, are family charters and family constitutions the solution? Our answer, no. They may be the recipe, but they are not the ingredients. That is the family members themselves. Charters and constitutions can form the foundation of creating a new family environment of emotional safety and that is how Next Gens should view them when they move into family leadership roles.