Like a great work of art, family enterprises are unique, crafted over time, and highly valued. While no two family enterprises are the same, they are united by a series of pivotal moments —opportunities to grow, evolve, or transform and preparation is essential for fully seizing those opportunities. In our series we’re exploring the eight foundational elements that can help family enterprises maximize the opportunities that arise. Because, with the right canvas, family enterprises can craft a business that supports its evolving vision, interests, needs, and values for generations to come.
Every family enterprise faces pivotal moments that can alter the course of their business, from leadership transitions to external market forces beyond the team’s control. Maneuvering through these challenges, mitigating risks along the way, and embracing new opportunities are at the core of a carefully designed and implemented governance model.
Family enterprises that aspire to reach this objective can channel the same entrepreneurial energy that helped them build enduring, multigenerational enterprises and business portfolios. A strong foundation of governance can help family enterprises make decisions in areas including capital needs, technology, leadership transitions, and incentive planning. With an informed perspective, enterprising families can unleash the shared vision and values that inspired their business in the first place.
One of the first steps family enterprises can take is recognizing the important issues that could affect the family and business over time. As families grow, so, too, does complexity, as companies may now be supporting growing stakeholder groups. They will need to manage the varied perspectives that exist within a family system. As new generations emerge, company leaders should ensure the appropriate legal and organizational structures are in place—such as wills, trusts, and succession plans—to execute on their objectives.
From checking the vitals to the value of independent oversight and more there are key questions to ask when considering establishing or refining governance model.