As family businesses grow and transition through generations, maintaining unity, communication, and connection becomes increasingly important—and complex. One powerful tool for supporting this evolution is the formation of a family council. A well-structured family council can serve as the cornerstone for preserving both the legacy and future of a multi-generational family enterprise.
Two Core Functions of a Family Council
At its core, a family council fulfills two essential roles:
Role #1: Education About the Business
The council provides a structured way to educate family members about the business. This goes beyond current operations to include a broader historical perspective and the company’s long-term vision. When younger generations understand where the business came from, where it stands today, and where it’s headed, they’re more likely to feel connected and invested in its success.
Role #2: Fostering Family Connections
As families grow exponentially across generations, personal connections can fade. A family council helps bridge these gaps, encouraging communication and relationship-building. One effective method is through family retreats. Organized and facilitated by the council, these retreats offer opportunities to educate members about the business while simultaneously deepening familial bonds in a relaxed, shared environment.
Structure and Best Practices
A typical family council consists of five to eight family members, with eligibility generally starting at 18 years of age. This allows younger family members to engage with the business and each other from an early age. Council members usually serve two to three year terms, ensuring continuity while welcoming fresh perspectives.
Meetings are held on a quarterly basis, with at least one being in-person each year. The number of virtual meetings is often influenced by where family members are located. Given today’s global dispersion of families, flexibility is key.
A well-integrated family council may also have a chairperson who represents the family voice in company affairs. In some cases, this chair may attend portions of board meetings and even present proposals from the family council to the board of directors—strengthening the bridge between the business and the broader family.
To support participation, many businesses offer stipends or travel allowances for family council members. This financial support helps ensure that geography and cost are not barriers to engagement.
Next Steps for Establishing a Family Council
A family council is more than just a committee—it's a vital instrument in nurturing the legacy of a family business. By educating family members and fostering meaningful relationships, the council plays a critical role in sustaining both the business and the family across generations.
If your family business hasn’t yet established a family council, now might be the perfect time to consider one. If you have any questions or would like assistance getting started, please check out our Family-Owned Business Services or contact us.