Creating a family charter

Creating a family charter can be difficult, painful and time-consuming. Some say it’s like opening a can of worms! But it is also enlightening and promotes healthy discussion amongst the family. A friend once said, the process brought harmony to the family where there was conflict. It protected the family in light of the business. We say, you can always get another business, but you cannot get another family!

The process may include bringing in a team of specialists together who are financial and legal experts. This will enable all aspects of governance and policy to be covered; all working together with the best interest of the family and future of the business in mind.

So what’s in this ‘Family Charter’? To nurture a sense of belonging, transparency, trust, clarity and responsibility topics may include:

  • The family creed or set of beliefs
  • The vision of the family seniors as well as next generation
  • Forums for communication. Around the kitchen table or a formal family council or family assembly
  • Succession planning
  • Employment of family members
  • Education and development of family members
  • Rights and responsibilities of Shareholders
  • Realisation of assets
  • Guide to the transfer and buying of shares
  • Philanthropy
  • Drop dead policy

The Family Charter can simply be a document held on the server or a beautifully designed and crafted document for all family members to treasure and refer to. It is a living document and will need to be updated every couple of years in order for it to remain effective and relevant.

It enables the family to have one foot in the past to understand the heritage and legacy of the business. The other will be stepping into the future, looking forward with ambition and pride.

This is an undertaking not for the faint hearted, but for the brave and ambitious who understand clearly all that has been sacrificed through the generations and who want to build on their legacy and take the family business to new heights.

Getting (and staying) organised

There is a 70% failure rate of UK family firms successfully transitioning from the first to second generation! That means only 30% make it. Even worse only 12% succeed to the third generation and 4% beyond that.
What’s going on? What could be more wonderful than working with your mum, dad and siblings? From my point of view, it is a dream.
Trust is at the heart of everything we do. We work hard but laugh a lot. We look out for each other and as well as our other non-family colleagues. And of course, it’s exciting building a business together in a niche that really does need our services.
But … fundamental to the success of any family business is how it is governed and for the family to discuss difficult things in the open. Whether it be who runs the show, make decisions, decides on where the business is going, family issues such as sibling rivalry or the senior generation letting go and and ….
By getting together is a brave move, perhaps emotionally tense or littered with family baggage. It has to be done nevertheless if the business is to thrive or indeed survive. Getting organized and professionalizing the business is essential but no easy task. The journey needs 100% commitment with all shareholders and family members outside of the business. One way that has proved very successful is by working towards and creating a family charter or family Constitution the family can properly and collectively agree with a policy that brings understanding and togetherness. It will address everything from ownership and employment of family members, to share transfer and succession. Difficulties that may arise as a business grows in size and complexity, can be pre-empted, addressed, agreed and recorded in a ‘living document’ that acts as a point of reference and Concord.
Structure. Consensus. Purpose. External advice. Family and shareholder responsibility. Commitment. Learning and development of next generation. Discussion. Counsel. Share values. All are vital.

Have we lost sight of our original vision?

As founders of our business we know our purpose. We are driven and trade our wares on the back of a handshake and looking in the whites of each others eyes. We believe in quality, craftsmanship, expertise, customer service. For the next generation it’s important that we revisit our vision and allow them to bring their aspirations to it too. For us to regroup, re-evaluate and build a future that can be shared amongst the rest of rest of the family and our people.  They are after all, what makes us who we are; the way we do things and believing in what’s important.

We call it the ‘family factor’. Aligning the values of the family within the business is key to unlocking and resolving issues and promoting a new found excitement. Openness, collaboration, trust, flexibility, fairness, inclusivity, leadership, share of voice, truth, cohesion and communications are important in equal measure.

‘It’s been wonderful seeing the business grow and being able to give opportunities to my three children. I hope they don’t feel obliged to join the family firm – sometimes I wonder if they just don’t want to hurt my feelings’

It takes time, courage and a strong sense of self to allow others bring their ideas to the table. We can help you make a plan where everyone can have their input, buy into the new vision and engage at a deeper level to make it happen. What a journey this could be!