There is a reason that families with wealth or family businesses sometimes speak about family governance but never about family government. Government implies an authority: a group that rules and another group that is ruled; it implies laws, that is, rules that are backed up by force. At least in Western families, which place great importance on individualism, family “government” would never fly.1
As a result, family governance can become something of a squishy term; what does it really mean? Is every family a democracy? Hardly. Nor does every family have to be.
Rather than talking about governance, we prefer focusing on the question, “How do we make shared decisions?” Who shares in what decisions may change from time to time, decision to decision. But of course the first and most fundamental decision is, “How do we decide?”
That fundamental decision is the one that all the essays in this section approach, in one way or another.
Barbara Hauser begins by highlighting principles and practices from the Organisation of Economic Co-operation and Development. These include transparency and the sharing of financial information, principles often captured in the form of a Family Constitution.
But how can you get to the point of designing and agreeing on a family constitution? The next two essays take up this challenge. Jennifer East offers practical, concrete steps for improving family communication, which come down to good planning, structure, and the courage to take action. Christian Stewart then offers an actual curriculum that families can implement – focused on strengths, stories, difficult conversations, and trust – to build healthy relationships. These are the foundation for the very ability to make shared decisions that last.
For many families, the process of making shared decisions intersects with the structures that organize their material assets, such as business entities or trusts. In the next essay, Katherine Grady and Ivan Lansberg describe the proper use of a business board of directors and a family owners council – and, very importantly, their points of intersection. They also include advice on how to prepare family members to contribute effectively to these deliberative bodies.
A fundamental tool for making decisions amid family wealth or business is the family meeting. These come in all sorts of shapes and sizes, and families who succeed over time use family meetings regularly. Mary Duke offers practical guidance in the what, where, who, and how of family meetings.
Finally, conflict is a natural part of family life, because different members have different interests and, sometimes, different values. Blair Trippe outlines ways that families can better define and manage their natural conflicts, with a particular attention to development – of the family as a structure and the individuals within it – as a means to manage and resolve conflict. Doug Baumoel then considers the crucial question, “Should you stay together as a family or go your separate ways?” Though it is deeply challenging to consider going your separate ways, the family that faces this question and then decides to continue together has made the most fundamental shared decision.
1Other cultures may accept a more “governmental” approach to family decision-making. For this reason, we have included authors in this section with broad geographic experience outside the United States: Barbara Hauser in Europe and the Middle East, Jennifer East in Canada and the Middle East, Christian Stewart in the far East and Australia, Katherine Grady and Ivan Lansberg in Europe and South America, and Mary Duke in Asia and Europe.
Chapter 28 – What Are the Best Ways for a Family to Make Decisions Together?
Chapter 29 – How Can You Improve Family Communication?
Chapter 30 – What Are Practical Tools for Building Healthy Families?
Chapter 31 – What Is the Point of Family Enterprise Governance?
Katherine Grady and Ivan Lansberg
Chapter 32 – Should You Have a Family Meeting?
Chapter 33 – How Can You Best Manage Conflict in Your Family?
Chapter 34 – Should You Stay Together as a Family or Go Your Separate Ways?