Family council
A family council is a small group of family members, chosen by the wider family, that represents the family's interests in the business and coordinates family matters between family assemblies.
A family council is the working body of family governance. As a family grows beyond a handful of people, it becomes impractical for everyone to discuss every family matter together. The council is usually a smaller group, often elected or appointed by the family assembly, that meets several times a year.
A family council typically:
- Drafts and maintains family policies, such as the family constitution and the family employment policy.
- Communicates between the family and the business, so that owners stay informed without interfering in management.
- Organises family education and the family assembly.
- Handles family concerns before they reach the board or turn into conflict.
Councils vary widely. Some are formal, with a charter, terms of office and minutes. Others are a few relatives who meet before the annual family gathering.
Family council or board?
This is the most common confusion. The board of directors governs the company: strategy, the CEO, financial oversight. The family council governs the family’s relationship with the company. A council may nominate family members to the board or express the family’s view as owners, but it does not run the business. Families that let the two blur often end up with family disagreements in the boardroom. What is a family council? covers the structure in more depth.
Why it matters for the successor
The successor will often have to present to the family council as well as the board, and the audiences want different things. The board wants decisions and numbers. The council wants to know the family’s interests are understood and its values kept. A successor who can speak to both in their own voice earns trust from owners who are not in the business day to day.