I've been searching for an expression to describe what's most valuable to a successful business family, other than its wealth. Some suggest "relational estate", and I like it.

Ironically, "relational estate" was first coined by divorce lawyers to describe the remnant relationship between ex-spouses that survives their divorce. Their continuing "relational estate" affects children and extended family, a web of shared friendships, and their participation in such post-divorce events as graduations, marriages, births and funerals.

Consider the "relational estate" of a successful business family. It includes genes, history and heritage. It encompasses the whole web of interpersonal relationships that connects them across generations. Their relational estate continues to include even deceased family members. In the words of lyricist Stephen Sondheim, "they die, but they don't".

Though intangible and impossible to quantify, your family's relational estate is enormously valuable to the family members who share it. Don't overlook its critical importance.

Business and financial wealth are scrupulously organized and documented; contingencies addressed; ownership and management succession carefully planned. Too often, however, the relational estate isn't adequately planned or organized.

Absent a will, intestacy laws divide one's property according to the presumed intention of deceased persons, as determined by the lawmakers. There's no such tidy default provision for relational estates. Neglected relational estates invite trouble.

Some business families have enjoyed highly organized relational estates for generations. Theirs are models for us. If your business family is looking for a starting place to organize, here are some threshold suggestions.

By definition, a business family is joined at the wallet. To a considerable extent, your family is already organized around its wealth. But that's not enough. Your family organization should include your relational estate. That's why I advocate forming family council.

A family council is not just a family shareholders' meeting, or an occasional family reunion, or a family gathering in response to crisis, though a family council could accommodate each of these. A family council is a systematic approach to share family information and news (both business and personal), to seek or to give family advice, and sometimes to make family decisions. Rarely is a family council a legal entity. It doesn't supplant or overrule existing boards of directors, fiduciaries, or managers, but rather informs their judgment through thoughtful and organized family input.

The family council may suggest, but rarely directs. On occasion, it articulates family preferences or provides "a sense of the family". In rare instances, it may decide highly sensitive issues, e.g. should a family member be discharged from family employment? Should the name of a family company be changed? Should the family name be invoked in a public promotion?

Necessarily, a family council decides who may participate in its deliberations—who is "family" and who is not. Are collateral aunts, uncles and cousins included in the family council, along with spouses, widows and widowers, fiances, non-marital partners or non-marital children?

How does the family support and nurture its members: children, teenagers, the elderly, those who are sick and disabled, addicted, geographically separated, alienated, detached or disinterested? How does the family encourage education and self-improvement, a sense of vocation, career planning, the work ethic?

How does the family relate to its wealth? Is there family consensus about inheritance, distributions, dependency, entitlement, investment, spending, saving, leisure, recreation? How does the family nurture its enterprises by promoting leadership development, orderly succession, meaningful family employment subject to appropriate entry rules?

How does the family relate to the community through philanthropy and community service? How are its charities and causes selected? How does the family promote its public image, yet protect personal privacy and personal safety? Who speaks to the public or the media on behalf of the family, and what is said?

How does the family relate to its advisors, to its key employees, and its fiduciaries? How are family disputes discouraged, prevented, or managed? When they arise, how are disputes resolved?

How, when and where does the family council convene? How does it preserve and promote family stories, family history, family heritage, family ethical, moral, religious or spiritual values? How does it encourage family members to keep in touch, become better acquainted, to enjoy each other, to have fun together?

I suggest a few preliminary meetings to try out the process. Expand natural family gatherings: tack on a day or two after your annual shareholders' meeting, or extend a holiday. Choose a resort setting or other meeting site that's emotionally neutral. Bring the little ones; provide child care and children's activities. Schedule no more than a half-day for meetings. Prepare and distribute an agenda in advance; invite input from all. Circulate news and information items beforehand.

Create an atmosphere of comfortable and safe discussion. Encourage participants to speak their minds respectfully. Discourage attempts to speak others' minds. Listen without judging. Be patient and helpful to those not familiar with financial statements or business practices. Express appreciation to your business leaders.

Eventually, write down in a Family Charter the plan of organization for your family council, your procedures, your family's basic values and family vision. Revisit your Family Charter often. Revise it when circumstances change, and at least once each generation.

I work at the intersection of family enterprise and the family's relational traffic. Where a wise family council sets the rules of the road and synchronizes the lights, it can be a great ride. Where families and wealth intersect, collisions and traffic jams can and do occur. A family council can minimize the hazards.

For more about Family Councils click here.

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