The Many Roles Of The Family Charter

A series for those journeying through family business succession.

Sometimes called a family charter, other times a constitution, legally binding or not legally binding, whatever form it may take, appreciating its role in the succession process is vital.

By whatever name it may go, the family charter reflects the beginning and the end of the family business succession process. It has a vital role as the process commences and a vital role at its conclusion and, if well-crafted, it becomes a continual reference point throughout the process. The family charter and the process of creating it can serve many purposes. Here are some of them:

• A means of discussing sensitive topics in a detached, not so emotional or personal, manner with the family.
• The recording and communicating of what has been agreed upon between family members as the charter takes shape and form.
• Records the goals for the succession process, which will serve as a guide for the entire process and an exit checkpoint at its conclusion.
• A legacy record of values and lessons learnt from generation to generation.
• Establishes the wealth allocation principles for the family and future generations.
• Sets out the corporate governance process that will apply once succession has occurred.
• A tool to instruct various advisors as to the wishes and intent of the family in drawing various legal documents.
• A historical record of the decisions made.
• A means of avoiding future family disharmony.

The charter and the process of crafting it should be used as a tool for drawing the family together across generations in a common goal of preserving, growing and transitioning wealth.

But, more importantly, it is a tool to facilitate discussion, turn the spotlight on the elephants hiding in the family dining room, and to allow the next generation to begin to form a relationship between each other that will endure throughout that next generation’s stewardship.

#familybusinesssuccession #familybusiness

An Invaluable Resource — ‘Transition — Orienteering The Lands of Succession’

Transition - Orienteering The Lands of Succession

A Topographical Guide To Orienteering Family Business Succession