Navigating blended family dynamics in a family business
Navigating blended family dynamics in a family business
How can I navigate a sensitive family business succession issue involving children from different marriages?
Imagine this scenario: You run a successful family business and have two children from a previous marriage. You are now in a second marriage and your husband has six children, none of whom are currently involved in the business. According to your family’s policy, any family member who holds a management position must own voting class shares.
Recently, your son expressed a strong interest in joining the business. During a family meeting, your husband raised a concern: he’s worried that his children, your stepchildren, may not be given the same opportunity to participate in the business as your son. This has created a delicate situation, making the conversation both sensitive and complex.
Integrating family and business: Key principles for success
This scenario highlights the intricate balance between family dynamics and business policies. While there are no one-size-fits-all solutions, guiding principles can help address these concerns.
Establishing clear policies and frameworks
Regular family meetings and clear policies that govern participation in the family business are crucial. These structures provide a framework for decision-making and ensure that expectations are clear regarding employment, management roles and ownership of voting shares. A meritocratic approach, where roles within the business and ownership of voting shares are based on merit rather than entitlement, can significantly reduce the risk of perceived unfairness. When family members clearly understand the criteria for employment, promotion and ownership, it fosters a sense of fairness and transparency. Applying these principles consistently promotes a harmonious family business environment. Having an independent adviser or advisory board can ensure that the family meetings are adequately governed with clear agendas, and policies and procedures of fairness are maintained when emotions run high.
Developing a family charter
To provide additional clarity and structure, developing a family charter can be highly beneficial. A family charter is a written statement that records the family’s heritage, culture, ambitions for future success and approach to conflict resolution. It ensures that all family members understand their roles and responsibilities within the business and when managing wealth and private assets and creates a shared vision for the future.
Practical support for complex family dynamics
Navigating family dynamics within a business and family wealth context can be challenging. Our family enterprise team is here to help. We offer structured, practical support to families, including policy development, governance workshops and drafting family charters. With our expertise, families can address concerns constructively and ensure a smooth transition for all involved.
Contact us today for constructive guidance on how to strengthen your family business and manage family wealth so that your family legacy can last generations.
