In this issue
Developing a family council checks a lot of boxes for a growing multigenerational family business. A family council provides a mechanism to engage and educate family members in a setting that includes positive social bonding time. Councils are a mechanism to define and address the “business of the family,” reduce conflict and promote positive social experiences associated with the business. They also encourage family interaction across branches and generations.
In order to sustain your family business for multiple generations, you need NextGen members who are prepared to serve as responsible stewards. This extends beyond the financial aspects of ownership and governance. Young people in successor generations must also learn to manage relationships among a diverse and growing group of family shareholders.
The WM Fares Group of Halifax, N.S., began planning for generational transition when the three second-generation siblings began asking questions about how decisions would be made in the future.
Wadih Fares, the 62-year-old patriarch and founder of the property development company, has the last word on business decisions. But in 2012, his children began to wonder how the process would work when he was no longer at the helm.
Generation of family ownership: Second.
Revenue: $110 million.
Number of employees: 2,500 full- and part-time.
Years with the company: 30 (fulltime).
First job at this company: Working as the salad boy at one of our restaurants, the 94th Aero Squadron in the San Fernando Valley, where I grew up. My brother and sister had washed dishes and told me to try and talk my way out of doing that.
While business founders have the foresight and drive to take a good idea and turn it into a profitable enterprise, history abounds with stories of successors who took the original vision and grew it to market domination. Frank Perdue, a G2, turned Perdue Farms into a household name. J.W. (Bill) Marriott Jr., also a founder’s son, led Marriott International to worldwide growth as a publicly traded, family-controlled company.
A thriving family business generally owes its success to family members who have devoted themselves to the enterprise. No one else has as much invested, either financially or psychologically, in the long-term success of the business as they have. So why should the family consider bringing in outsiders to serve as directors? After all, the family understands the business and the dynamics among family members (and family branches) better than anyone else could.
An often-overlooked element in succession planning is helping retiring leaders plan for their personal transition. When they are no longer at the helm of the enterprise, what will they do with their time and talents? This
often is a critical gap in planning that may contribute to a struggle to let go.