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Family Governance

In order to ensure a healthy dynamic between members, a family-run business should make room and plan for family meetings during which everyone is free to voice their opinion openly.  However, without a family governance plan, it can be very difficult to synchronize members and address concerns. Engaging a third-party to create a family council, composed of family members, that will organize and structure the meeting can be the simplest way to achieve goals without causing conflict, especially when a family’s count exceeds fifteen adult members.

Family meetings can include a variety of activities, for example: discussing the direction of the company, giving presentations, updating members about share transfers, new tax laws, etc. A designated family council will be able to:

  • Plan family meetings
  • Discuss business plan, ownership, and family concerns
  • Facilitate decision-making
  • Inform the board of directors of family views and maintain the dialogue with the boards
  • Regulate family activity through the development of plans and policies
  • Protect against family interference in order to achieve goals
  • Obtain loyal family shareholders
  • Scout family members for business talent
  • Schedule events to educate family members about the business plan
  • Organize gatherings to promote harmony between members

It is common practice to elect one family member per family branch to create the family council while being mindful of representing genders, generations, in-laws, active and passive owners, and both local and distant participating members. Many families will reimburse council members for expenses, while others offer a modest compensation.

If a family is unable to promote trust between all parties and a commitment to the business, hiring a moderator to organize the meeting can be extremely helpful. With so many personalities and emotions at work, it can be difficult to come to a consensus regarding important decisions.

Family councils are separate from and complementary to a board of directions. This council sets and recommends family policy guidelines to the boards, while the board sets business policy guideline and makes recommendations to the family council.

In 2017, AWM Global Advisors was ranked by Advisory HQ as one of the top 10 Wealth Advisors in San Diego. AdvisoryHQ considered at a wide range of factors in the selection process including fiduciary duty, independence, transparency, level of customized service and years of experience amongst others. Details of the selection process can be found in the link below. Firms do not pay a fee to be selected nor are they advised that they are under consideration until after the selection is made. No employees or clients were interviewed during the selection process. Third-party recognition from rating services are no guarantee of future investment success. Working with a highly-rated advisor does not ensure that a client or prospective client will experience a higher level of performance. Methodology for Ranking Top Advisors in the U.S and U.K.