Robert A. Sedlák
Founder and CEO transformis Consulting SE | Guest Professor ECNU Shanghai | Certified Business Mediator (German Mediation Act) | Head of the Family Businesses competence team
Succession in transformation
Family Governance
Developing rules and formats that keep the business family, the shareholder group and the company connected over the long term.
Family governance looks at how family, shareholder group and company are connected in every important decision. It becomes a topic when the business family lacks a shared understanding of how the company should be carried forward, when family and management are not sufficiently aligned, or when a generational transition calls existing arrangements into question.
What you come away with
- Clarified membership, roles and participation rights within the business family
- Agreed values, goals and communication rules, set out as a family charter if desired
- A set of rules for dealing with conflict within the business family
How we work
- 01
Clarify membership
Determine who belongs to the business family and which decisions they take part in.
- 02
Gather expectations
Take in views on ownership, participation and the company's future.
- 03
Agree rules
Jointly adopt values, roles and rules for communication and conflict.
- 04
Review
Evaluate and develop the agreements at fixed intervals.
Clarifying membership and roles
The starting point is the question of who belongs to the business family and who plays a part in which decisions. Family, ownership and company follow different logics. In the family, the individual person matters; in the company, the function and competence; in the shareholder group, the size of the stake. We make these differences discussable so that roles are not quietly blurred.
Agreeing values, goals and ground rules
The family works out its values, goals and a shared guiding vision and links them to the company's direction. This includes rules for information and communication, platforms for regular exchange and a set of rules for dealing with conflict. The results can be brought together in a family charter.
Family governance does not create a family free of conflict, but rules that keep the family able to decide even when interests differ.
Anchoring agreements for the long term
There is no single model of family governance, only a process that suits the particular family. Our service portfolio describes a period of six to twelve months for this; the actual scope depends on how complex the relationships are and on the disagreements that exist. What matters is that the agreements are reflected in decision-making and participation rights and that the family reviews them at fixed intervals.
Book an initial callManaging tensions rather than resolving them
Family businesses are shaped by the interplay of three distinct social systems. This gives rise to tensions that cannot be permanently resolved. In the family, fairness tends to mean equal treatment; in the company, it tends to mean differentiation by performance and ability. Family members are owners but cannot act like investors on the capital market. Family governance is not meant to eliminate these contradictions. It creates structures and procedures with which the family can weigh them consciously when making decisions.
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We distinguish between conflicts that can be dealt with through clarification, negotiation and binding agreements and structural tensions that need to be managed over the long term. This distinction takes pressure off conversations, because not every disagreement is read as a mistake or a personal failure.
From conversation to binding agreement
The work begins with conversations with family members and, depending on the mandate, with shareholders and executives. Differing expectations regarding ownership, participation and the company's future are gathered and discussed in joint family meetings. This produces drafts for values, goals, roles and rules, which the family reviews, amends and finally adopts.
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For the company, what matters is how these agreements translate into its decision-making paths. Who is informed when, who has a say, and where does the family's influence on operational management end? Joint activities of the business family and regular platforms for exchange keep the shared self-understanding alive.
Deliverables: Clarified membership, roles and participation rights within the business family; Agreed values, goals and communication rules, set out as a family charter if desired; A set of rules for dealing with conflict within the business family.
Family governance clarifies roles, rules and ways of working together. Articles of association, partnership agreements and inheritance and tax planning are matters for the relevant specialists, with whom the results are coordinated. Advisory board consulting is not automatically included.
Frequently asked questions
When is family governance the right step?
When the business family lacks a shared understanding of how the company should be carried forward, when family and management are not sufficiently aligned, or when a generational transition is imminent. Another indication can be that unspoken family expectations are affecting business decisions.
How do family strategy and family governance differ?
Family strategy clarifies the goals and expectations of the business family. Family governance translates this clarity into roles, participation rights, forms of communication and rules for conflict. The two are closely linked; family strategy is often the first step.
Does a family charter replace the articles of association?
No. A family charter describes the family's self-understanding and ground rules. Legally binding provisions belong in the articles of association, partnership agreement or testamentary dispositions, which are drafted by the relevant specialists. We coordinate the family's results with these specialists.
Prefer to talk directly?
What decision are you facing? Together, we clarify your situation, the people involved and the right next step.
Your initial call
Let’s talk about your situation and what you want to develop in your organisation.
- Your situation
- What brings you to us
- Possible next steps