Why Does Every Family Need Them?
You know that family governance document that you have in the filing cabinet; how often have you looked at it in the last year? I’m guessing not much, if at all, and without knowing what’s in there, I don’t blame you. The truth is, most of those documents do serve a key purpose, but before they can be used effectively, a key agreement needs to be made between all family members – Guiding Principles.
The textbook definition of guiding principles are that they are moral values that set a standard for behaviour and attitude within a workplace. Companies generally create guiding principles to shape the culture of their work environment and to ensure that all of their employees understand what behaviour they expect.
Taking this definition and perhaps going a level deeper with the family, Veritage helps families co-create their guiding principles that do one main thing: They establish how you agree to treat each other as human beings, before we throw in the complexity of shareholder, director, parent, child, etc. Our belief is if you get the human piece of it right, it doesn’t matter what hat anyone wears in the family, business or ownership circle. You have the common denominator as a good human and a crystal clear understanding of the expected behaviours.
By working on this process, we don’t just help you identify the family guiding principles, we define them and the action(s) that proves you are living them. This way, we can measure whether they’re being applied or lived by the family. It puts everyone on the same page.
Here are three examples of Guiding Principles, from the Veritage client perspective:
Guiding Principal # 1: Kindness
Definition: Always assume the first position is to be nice. Seek to understand and be respectful. Receive self and others respectfully. When judgment comes up, recognize it’s about self and not the other.
Action: CALLING UP.
Guiding Principal # 2: Inclusion
Definition: Be informed, being part of a group, have say, belonging, trusted, connection.
Action: VALUE AND EMPOWER YOURSELF AND OTHERS
Guiding Principal # 3: Unity
Definition: Harmony, alignment, equality, fun, empowerment, working towards the same end goal, common purpose.
Action: SPEAKING THE TRUTH
Why does this matter? One word: Accountability. Not just to your family members but to yourself as well. When everyone is on the same page as human beings, there is clarity and transparency of behaviour and of each other. It provides agency – you’ve all contributed to it so you’ve already bought in.
Once this work has been completed, my bet is you are going to get a lot more out of that governance document sitting in the filing cabinet.