Confidentiality Inside and Outside
There’s no guarantee that amicable families will remain so. But sound governance encourages good family relationships to continue. In their search for sound governance most families require a skilled facilitator. Only a mediator can facilitate governance-building – and other important family deliberations -- while assuring confidentiality both inside and outside the family.
If you are healthy, why watch your diet? Why exercise regularly? Why quit smoking? Why get regular medical checkups? Indeed, why carry medical insurance? Because these are sensible precautions. No healthy person is immune from future health problems.
No amicable family is immune from future discord. Births, deaths, marriages, divorces, estrangements, alliances, unforeseen events, changes in circumstances –all can challenge the peace that amicable families enjoy today.
If an amicable family is also joined at the wallet, the risks of eventual turmoil rise sharply. Sharing family wealth or a family business should be deeply satisfying: enjoy it, use it wisely, grow it, cultivate the opportunities wealth provides. These are good signs of healthy wealth. But wealth-sharing can also generate hazards, hurts and unhappiness.
“How can we perpetuate healthy wealth? What can our family do to avoid the kinds of disputes that destroy other wealth-sharing families? How can we prevent disputes from arising? Or if they do, how can we manage our differences in amicable ways?”
Maintaining healthy bodies requires a regimen. So does healthy wealth -- but where to start? Begin by organizing around your wealth. Wise families usually choose a facilitator – a “personal trainer” of sorts to begin a healthy wealth regimen –to surface the issues, build productive agendas, guide sensitive discussions, organize ongoing family councils. Effective family governance is critically important to maintaining healthy wealth.
Various therapists, coaches, financial counselors, and family business consultants hold themselves out as family governance facilitators. Some are quite skilled. Yet non can guarantee confidentiality of the governance-building process. Should discord generate a lawsuit, neither the facilitator nor family members may claim a privilege of confidentiality.
Some lawyers would be excellent family facilitators. But they are limited by ethical constraints. Lawyers may ethically represent all family members as their clients. But whatever one family member discloses to the lawyer must be shared with all other client members of the family. Hence, lawyer-facilitated governance-building remains confidential from persons outside the family, but individual disclosures to the lawyer are not confidential inside the family. (The lawyer's dilemma deepens if some but not all family members are his/her clients.)
In my experience, this “disclose all to everyone” requirement can be a huge impediment to fruitful family discussions and deliberations. In the interest of continuing family solidarity, some confidences need to be disclosed only to the facilitator, and not shared with other family members.
Mediators alone enjoy the best of both worlds. If governance-building is facilitated by a mediator, the entire process is confidential from third persons. In addition, mediators are free to interview individual family members and to keep their confidences from other members of the family. The same is true of other mediator-facilitated discussions involving family business or family wealth e.g. family business succession, shareholder issues, distributions from estates, trusts or family companies, selection of outside directors, fiduciaries, advisors, etc.
Wise families value their mediator’s unique role as a neutral, a confidant and a patient guide through difficult but transformative conversations. Mediation makes good sense for families who yearn to perpetuate their amicable relationships down the generations.