Family business governance - spouse & in-law

Listen to Dr. Ivan Lansberg and Navin Amarasuriya discuss the integration of in-laws into the family governance system. Differences in whether or not to include in-laws in decision making processes varies by family and also by culture. The incorporation of in-laws poses benefits, in terms of being exposed to new ideas, but these benefits are nevertheless accompanied with a corresponding set of risks.

Ivan Lansberg So when you’re dealing with issues of governance, one of the first things, one of the firs assignments is bringing the relatives who have the leadership, who have been entrusted with the leadership of the governance to actually make a conscious choice of how are they going to demarcate the boundaries of the family. It’s particularly powerful when it comes to the treatment of spouses. And we’ve come to sort of segment that choice into three modes that families pick. In one choice, my daughter’s husband is my son. I adopt him, he’s a full citizen of the family. In another choice, my daughter’s husband is not my son, he’s my son in law. What happens when you’re organizing a family meeting in that condition, somebody has to have a conversation that do we invite the in-laws in? Then there’s a third condition where my daughter’s husband is just that – my daughter’s husband. And in that condition, the assumption is that the in-law is not a member of the family and we wouldn’t think of having a family meeting with them in. Navin Amarasuriya In a lot of case studies that have come across with Asian families, they tend to ensure that the people who marry into the family don’t get involved in the operational side or the shareholding part of the business and, in this case, the positive are not immediately clear, although they would bring just a completely different perspective to the business that could potentially either alert or guide you know, what the future expansion plans of the business would be.