Creating a family advisory board
The founder wanted to transfer partial ownership of the family business to his children and to give them more authority, but he was concerned that he’d lose total control. He wanted his children to run the business but he also wanted to retain some control by, for instance, being able to exercise a veto if he needed it.
When family members start suing each other
We helped create an effective family advisory board where the founder and his children discussed and agreed on key business issues. However, when the founder later died, conflicts about the direction of the company resulted in some family members wanting to leave the business entirely.
But there was no agreed-upon mechanism for managing such situations and the conflict reached a point where family members were suing each other in court.
Formulating a solution
We sat down with the family and formulated a mutually agreeable united vision for the business and its future.
We also developed protocols that addressed:
- The process and timing of exits
- Which family members were eligible to purchase shares
- Selecting the most suitable valuation method
- The company’s obligation to buy shares
Revising the company board to achieve expansion goals
Our client was a fifth generation family-owned business in the domestic entertainment and media industry. The family always had a family member as the chief executive officer and chairman of the board role, and the board of directors consisted only of family members. The company wanted to expand its business abroad but decided it lacked the expertise required to lead the business in these new ventures.
Picking the right talent
We worked with the Company to identify the right talent needed at the board level. We also:
- Evaluated the board of directors’ oversight roles
- Suggested expanding the board to include outside members
- Recommended forming committees to steer and oversee management functions
- Suggested candidates for the new board seats
As a result, two new board members with extensive multinational business operations experience were added to the board. These new board members provided invaluable insight to the family board and management company as it embarked upon its international expansion. Subsequently, additional outside board members were added, including a former CEO who helped the company work through succession planning for its executive team.