NexWhy Governance and Emotional Governance DO NOT compete and how Organized Emotional Governance improves business and reduces turnover, enabling Traditional Governance to be more effective.
Emotional Governance, when not confused with financial governance, increases the bottom line, eliminates resistance, and relieves costly weight in all family business.
Family enterprise requires two types of governance to ensure longevity and legacy.
Most successful families will have the traditional form of governance— architected to assist with the DECISION-MAKING process and procedures — for the ownership and leadership of the business. This is a great start, and yet, something vital, foundational is still missing to ensure the proper governing of the human beings involved in the family business.
When one looks at the family business system, the common denominator is human beings. Regardless of what role they play — whether it be CEO, Shareholder, Director, Parent, Child, Grandchild, Aunt, Uncle, Next Gen or Sibling — their basic role is human being. And, human beings have these funny things called feelings, which by the way are NOT rational.
When human beings get triggered they don’t behave in rational ways. As my own coach says, “Relationships would be wonderful if it weren’t for the humans involved!”
Traditional Governance is designed and structured to manage the rationality, wisdom, and logic of decision-making. It is not designed to manage anything outside of that—such as the human emotional issues and behaviours which are brought up and out through the relationships the humans are involved in.
The intention of “governance” is to create a safe space for relationships by having processes and procedures that foster respect and care among all, beginning with oneself. When feelings and emotions get in the way of Traditional Governance, there is a gap that cannot be addressed by traditional governance.
Family unease when repaired improves the bottom line and ensures longevity.
One of the functions of traditional governance is to have processes and procedures designed to support improvement of the bottom line and to ensure longevity of the family business and assets.
Organized Emotional Governance will reduce the tension in family business and ensure legacy.
The power of Emotional Governance is in creating a culture of safe space for the human beings to openly communicate with each other in such a way that all members of the family feel heard, seen, and understood, and most importantly feel SAFE with each other to speak their truth.
If family members cannot speak their truth, in a safe space, no policies or procedure will help. No form of processes and procedures will change the poor behavior of family members. Emotional Governance can and will which is why I do what I do.
Organized Emotional Governance plays a critical role alongside Traditional Governance in ensuring family business and the family are financially, statutorily, and most importantly EMOTIONALLY safe.
With Emotional Governance in place, the family has a platform from which to develop itself and grow its most valuable capital, it’s human capital — the Next Generation.
In having a set of agreed-upon guiding principles the family lives and embodies, the foundation is established for traditional, financial governance to best perform.
Families who are committed to creating a culture of Stewardship recognize the need to have both sets of governance in place — to ensure their continuity. Traditional governance for the running of the business, ownership decision making, AND Emotional Governance for the management of the human issues which will inevitably come up.