When a Family Council Loses Its Way
Reinvention is key
It is quite a milestone when a family sets up a family council. Its presence signals that the family has placed non-financial activities — personal relationships, learning and development, philanthropy, social values and building family connections — on an equal plane with their financial activities. They have made a commitment to be not just a financial entity and a business, but a vibrant family creating its own value by its work. They show that the family is more than a business or family office; it is an active, vibrant, life-enhancing entity for family members and those around them.
The first years of a family council are rich and strong. Councils create a family constitution, hold meaningful family meetings, carry out philanthropic initiatives, develop education programs for young people, and create shared purpose and aligned action to connect a growing extended family. This is intense, hard — but ultimately rewarding — work.
But over time the energy fades. The spring and summer of the family council are followed by a fall and winter when the energy, focus and commitment fades. The original leaders burn out or move on, younger and new leaders fail to step up, gatherings have less attendance, and family members seem to reallocate their energy in other directions. Is this the end? Is a family council time-limited, working for a while but tending to fade over time?
This is true of many families, who find that their connection as a family and their need for a council to develop shared activities has come and gone. Fighting against entropy, they no longer find the energy to do the work of family governance. But some families do not accept this and want their council to e remain a focus for their shared identity.
As noted by my colleague Cynthia Scott, who first used the “seasons” metaphor to describe the ebb and flow of energy and vitality in a social system, voluntary shared activity does not evolve in a straight line but in cycles that can be viewed like seasons. When a family is feeling the productive growth of its summer, it should be aware that autumn lies ahead:
An active core group of the family gives their all and begins to tire and pull back. Activities that were fun and productive become a bit repetitive. Now meetings seem empty or unproductive, and people do not attend. Differences emerge and family members decide to stop engaging rather than work to find common ground. As the air chills, leaves fall to the ground.
What can be done when a family council faces autumn and winter? Learning from the seasons offers some insight. With following seasons renewal begins anew, first quietly in dormancy and hibernation, then with new flowering. A family council can note the coming of autumn and take a time-out to refresh and allow family members to go their own ways and have new experiences.
After winter, there is a natural path to renewal. In a family council, like a field in the spring, new life emerges. This can happen by calling together a new group of family members — maybe those who are just growing to adulthood or newly married-ins — to bring new ideas to the council. The old leaders can agree to step aside (wise families have term limits, not to push people out but to make room for new ideas) and new ones can step up. The council can ask, “Given what we have done, what new achievements can be envision for our next spring?” They may find that some elements of the family who have felt excluded or did not participate in last year’s agenda have new visions of what the family can be. New projects are like new plantings, leading to new leaves and flowers.
When we talk to families that have had councils for a generation or more, they describe these seasonal shifts and create policies and practices that do not keep things stable, but that allow continual evolution. A family charter and agenda need to be refreshed and re-envisioned each new seasonal cycle (not necessarily a calendar year). When we see families that have succeeded over many generations, they invariably talk about how a new generation or leadership group emerged with new ideas, and how they are not doing what they did a generation ago.
What specific actions do we see in renewing family councils?
· Seeking out networks and attending gatherings of other families to hear new ideas.
· Encouraging family members who are coming of age and who have not been active to get involved.
· Looking over agreements and policies and adjusting to fit the interests of a new generation.
· Offering easy paths for new family members to learn about family activities and to become part of them.
· Cresating task forces and initiatives that allow family members to consider new directions, including new approaches to business and investment.
· Making sure that resources are available to support shared activities and these new paths.
A family council is a wonderful step forward for a family; but a family council is not an edifice constructed once and then lived in. As the seasons change and the family grows, the council and family governance must expect to continually reinvent itself.
Dennis Jaffe is senior research fellow at BanyanGlobal Family Advisors.