A no-nonsense guide to key family documents

When the Caladan family gathered for its biannual shareholder meeting, there were a number of significant topics to discuss. The most important was a clarification of some items in the buy-sell agreement. Prior to the meeting, each family shareholder had access to a digital version of the family constitution. Everyone was expected to be prepared to discuss the topics on the meeting agenda. The family council had printed relevant family documents for reference during the discussions. The family was also due for its scheduled review of the family employment policy, which had become outdated for the current generation and was up for its review right on schedule. When the meeting began, the family read their vision and values statements out loud, and family leaders reminded everyone of their code of conduct. The meeting conversation was civil, spirited and effective because all the necessary information was close at hand.

Contrast this with the Laggertons, who operate without a set of clearly defined policies or documentation. The three siblings had begun to argue over how their advisory board meetings should be conducted and what matters required a vote versus verbal consensus. Without a board charter or bylaws, there was no clarity on this topic beyond how their father informally ran the meetings. To complicate matters, the father had not yet updated his estate plan after his divorce, and the three siblings had no idea of the possibilities of future ownership. The three of them were aligned in theory but had never really discussed their goals and vision for the future of the business. The meetings tended to devolve by the afternoon, with the dad becoming exasperated and the youngest sibling checking his email and social media. Without clear guidelines, the Laggertons operate in an atmosphere of confusion.

Already a subscriber? Sign In

About the Author(s)

Related Articles

KEEP IT IN THE FAMILY

The Family Business newsletter. Weekly insight for family business leaders and owners to improve their family dynamics and their businesses.