May 23, 2018
Beyond complying with legal requirements, a company will call for an annual general meeting to provide shareholders (owners) opportunity to shape how the company and its business is to be run. At such meetings, the company’s internal dealings and relation with the external business world will be discussed. Similarly, founders of family-owned businesses should create formal arrangements where internal family issues, family businesses and interaction of the family with the family businesses are to be discussed. At the heart of most well-known family businesses that have been successfully transferred from one generation to another can be found periodic family meetings where family members come together to reflect on family and family business issues.
An entrepreneur with interests in diverse areas of business would ordinarily have members of his family owning substantial interests in the various businesses or companies. At initial stages of the founder’s business, majority shareholdings in his companies may be held in the names or by his immediate family only i.e. spouse(s) and children. However, as the businesses and family flourish and expand over the years, ownership of the businesses may not be limited to immediate family members only but may also extend to in-laws, grandchildren, nephews, nieces and even siblings. This warrants the need for periodic gathering of the family members especially those with stake in the family business for discussions on matters surrounding the family and its businesses. A family assembly aptly describes this type of setting.
In this series, we will be discussing the concept of family assembly, its essence and relevance to family business.