Family business governance - cousins & shareholders
Listen to Paul Darley, Michael Schoedinger and Stephen Woodman discuss their experience setting up a governance structure for their family business. In every family business, the governance structure may be unique, however, it is important that the decision making process is transparent to employees, in order to create an open work environment.
In my opinion, it’s very important that they ownership structure mirror the management structure in the business, and because of that, we’re what’s known as a cousin consortium. Today, our company is primarily owned by the third generation.
We’ve been very clean for 5 generations, where it’s just two brothers. And my generation is the first where it’s not two brothers, its two brothers and a cousin. I think the more family members you have, the more complicated it gets.
In order to make sure their properly represented, you have to have transparency, you have to have consensus building in your decision making, you know an autocratic style of a single president and CEO making decisions in a family business with such diverse family ownership just simply doesn’t work today.
We brought in an outside advisor and we had him, for quite a while we’d meet with him. And he’d put together, get the family together, get business people together, to come up with our ideas, our morals, what or goals were and get us communicating, get us talking together, see where we wanted to go and how to bring this business forward.