by Christian Stewart

Here is a checklist of important and fundamental questions to consider when reviewing the effectiveness of your current family governance arrangements:  


  1. Are you holding regular family meetings?

  2. Do you feel that the family meetings provide a safe environment for family members to express their differences?

  3. What is the trust level like among family members, especially those that are involved in a management role?

  4. Are there important topics that the family need to be talking about but don’t talk about?

  5. Do you have a sense of what communication is like in your family; of how flexible the family can be and of how optimistic the family members are about the future?

  6. Is there a shared dream for your family and does that shared dream incorporate both the current generation as well as the dreams of the next generation?

  7. Do you plan for family member participation in your family governance system?

  8. How do you keep family members engaged and supportive of the family governance system?

  9. How balanced are your family council meetings? 

  10. Do you have a good balance between doing what is good for the family and doing what is good for the family enterprise?

  11. What are the topics that you must educate the family member owners about so that they can play a meaningful role in your family governance system?

  12. In your family, which is viewed as being more important, ownership or management?

  13. How are the people who manage the family business or family wealth held accountable to the family members as owners?

  14. Do the family members as owners have a common vision and a common view on where they want to see the family enterprise going? Is there a common view on risk, on liquidity, on strategy, on values, on the people who fill senior executive and board roles?  

  15. Do you have an exit plan in place, and if so is it fair for the vendor and fair for the purchaser?

  16. Is your family governance system a voluntary system?

  17. Do family members understand the benefits of working together jointly and do they understand the costs of working together?

  18. How do you make sure the family values are real values – not just some “mom and apple pie” statement?  Do you use your family values as a tool to help make joint decisions together?

  19. Is the family involved in strategic planning for the family enterprise?

  20. How does your family council talk to the Board?

  21. How does your family view conflict? Do you have a process for resolving conflicts? Do you have a process for resolving deadlocks? Do you have a process to ensure that conflicts are not avoided?

  22. If you have a family trust, do you have a family governance system as well?  Do you have family meetings to talk about the terms of the family trust(s)?

  23. If you have a family trust, do you also have an exit plan in place?  Often family trusts don’t make an exit easy, yet “pruning the family tree” helps preserve family wealth.

  24. If you have a family trust, will it enhance the lives of its beneficiaries, or will it harm them?

  25. Do you have an ongoing process for asking the advisors to your family to help point out the transitions your family is going to face over the next ten years, and to ask them what steps you should be taking as a family to get prepared for those transitions. 

  26. Do you have a process for encouraging entrepreneurial activity in the next generation?

  27. If you are a business owning family, do you have an employment policy that requires at least 3 – 5 years outside work experience?     

  28. When was the last time you reviewed your family governance system, constitution, policies, relevant agreements?   

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