Table Of ContentAdditional Praise for
The Family Council Handbook
“Thanks to the principles outlined in McClure and Eckrich’s The Family
Council Handbook , our family business has smoothly transitioned from
an entrepreneurial company built by two brothers to a third-generation
global leader in the wine industry. We raise a glass of wine in honor of
their guidance and wisdom. Salute!”
—James Mariani and Cristina Mariani-May,
co-CEOs, Banfi Vintners
“The Family Council Handbook persuasively sets out the benefits to be
gained when family and business are brought together in a well-managed
structure. Business families will recognize themselves in the examples
and case studies, and will find this detailed, practical, step-by-step guide
indispensable in achieving the optimal outcome: maximizing business
gains while building family strength and harmony.”
—Marcia Sauder, chair, Sauder Family Council
“A good step to achieve success in your family business and family
council is to have this book on your night stand.”
—Cristina Porres, chair, Grupo
Porres Family Council
The Family
Council
Handbook
Family Business Publications are the combined efforts of the Family Business Consult-
ing Group and Palgrave Macmillan. These books provide useful information on a broad
range of topics that concern the family business enterprise, including succession plan-
ning, communication, strategy and growth, family leadership, and more. The books are
written by experts with combined experiences of over a century in the field of family
enterprise and who have consulted with thousands of enterprising families the world
over, giving the reader practical, effective, and time-tested insights to everyone involved
in a family business.
The Family Business Consulting Group, Inc., founded in 1994, is the
leading business consultancy exclusively devoted to helping family
enterprises prosper across generations.
The Family
Council
Handbook
How to Create, Run, and
Maintain a Successful Family
Business Council
Christopher J. Eckrich and
Stephen L. McClure
THEFAMILYCOUNCILHANDBOOK
Copyright © Christopher J. Eckrich and Stephen L. McClure, 2012.
Softcover reprint of the hardcover 1st edition 2012 978-0-230-11219-3
All rights reserved.
First published in 2012 by
PALGRAVE MACMILLAN®
in the United States— a division of St. Martin’s Press LLC,
175 Fifth Avenue, New York, NY 10010.
Where this book is distributed in the UK, Europe and the rest of the world,
this is by Palgrave Macmillan, a division of Macmillan Publishers Limited,
registered in England, company number 785998, of Houndmills,
Basingstoke, Hampshire RG21 6XS.
Palgrave Macmillan is the global academic imprint of the above companies
and has companies and representatives throughout the world.
Palgrave® and Macmillan® are registered trademarks in the United States,
the United Kingdom, Europe and other countries.
ISBN 978-0-230-11219-3 ISBN 978-1-137-00052-1 (eBook)
DOI 10.1007/978-1-137-00052-1
Library of Congress Cataloging-in-Publication Data is available from the
Library of Congress.
A catalogue record of the book is available from the British Library.
Design by Newgen Imaging Systems (P) Ltd., Chennai, India.
First edition: June 2012
10 9 8 7 6 5 4 3 2 1
ThTh is book is dedicated to the thousands of business owners who
have worked with us, the Family Business Consulting Group,
Inc. We thank you for believing in an enterprising family life,
your courage to try new things and overcome challenges, and
your passion to become better versions of yourselves. You have
taught us much about what it means to believe in the power of an
enterprising family and the power of family itself.
Contents
List of Figures xi
Preface xv
Acknowledgments xvii
1 Family Organization and Governance for Sustaining
the Family Business: A Field Manual 1
2 Reasons for Starting or Resisting a Family Council 9
3 Stages of Family Businesses and Types of Family
Councils 19
4 How to Start and Organize a Family Council 37
5 Running the Family Council 77
6 Committees of the Family Council 127
7 The Family Assembly and the Family Association 151
8 Special Family Governance Structures: Owners
Councils and Executive Committees 207
9 Family Leadership 219
10 Using a Professional Facilitator 245
11 Transitions in the Family Council 261
X CONTENTS
12 Connecting the Family Council with the Board and
the Business 277
13 Family Communications 303
14 The Journey Forward 319
Appendix 1: Defifinitions 323
Appendix 2: Family Council Charter Example 329
Appendix 3: Family Council Assessment Form 333
Appendix 4: Decision Making on Family Business Matters 339
Appendix 5: Examples of Shared Expectations 347
Appendix 6: Family Advisor Candidate Rating Form 349
Notes 353
Index 357
Figures
3.1 Stages of Family Councils 23
3.2 Early Sibling Stage: Negotiating Table Family
Council 28
3.3 Late Sibling Stage: Harvest Table Family
Council 31
3.4 Cousin Stage: Smaller Round Table Family Council 33
3.5 Cousin Stage: Larger Round Table Family Council 33
5.1 Example Advance Memo Requesting Agenda
Input for a Family Council Meeting 95
5.2 Amanda’s Final Family Council Meeting
Agenda 99
5.3 Matching the Content of a Meeting and the
Overall Meeting Intensity 103
5.4 Example Meeting Design Indicating Process
for Each Topic on the Agenda in Figure 5.2 104
5.5 Robinson Family Council Agenda 110
5.6 Questionnaire Item Assessing Family Council
Performance 123
6.1 Family Education Matrix 136
6.2 Topics and Activities for Family Education
and Development 139
XII FIGURES
7.1 Family Organization Picture 153
7.2 Eight Questions to Determine “Who is
Family?” 155
7.3 Focus Group Announcement 171
7.4 First Reminder 175
7.5 Sample Criteria for Site Selection 176
7.6 Action Items 177
7.7 Sample Budget 183
7.8 Organizing Tool 190
7.9 Sample Family Assembly Agenda 192
7.10 Ideal Family Facilitator Qualities 197
7.11 Forming Shared Expectations 202
7.12 Family Action List 204
9.1 Family Group Planning Sheet 222
9.2 Chair Role Description: Family Employment
Policy Committee 2 27
9.3 Qualififi cations for Earning a Voice in Family
Business Governance 236
9.4 Family Leader Feedback Form 238
9.5 Family Council Chair Assessment 239
10.1 Questions to Answer when Bringing in an Outside
Facilitator 252
11.1 Chair Role Qualififi cations: Shank Family Council 262
11.2 Sample Leadership Transition 266
11.3 New Family Council Chair Orientation Checklist 266
11.4 Rules for Voting in Elections 268
