Webinar: Governance 101
September 2, 2025
Creating and working within meaningful governance structures in your family and in your business are keys to success for families with shared assets. Well-defined structures that everyone understands remove ambiguity and foster productive conversations and clear decision making.
Overview
Joyce Hrinya and Shelley Taylor hosted our September webinar, where they provided an overview of Boards of Directors and Family Councils. They discussed the importance and key functions of these structures and how they rely on each other for shared success. This webinar includes strategies and tips for starting a Board or Family Council, as well as enhancing existing ones.
Videos
The Three-Circle Model: knowing your role
Good family business governance is vital because it creates a safe place for effective communication, ensuring conversations happen in the right forum with the right perspective, or “hat,” on.
The foundational concept is the Three-Circle model:
- Family
- Ownership
- Business/Management
The complexity lies in the fact that one person can wear all three hats! Our focus is on the structures, the Board of Directors and the Family Council, that help manage these roles and clarify who has a voice and decision-making power in any given context.
Why governance matters now more than ever
Governance provides internal clarity, but it is also a necessity in today’s rapidly changing world.
Internally, it establishes role clarity by defining boundaries so individuals are not overstepping their authority. It ensures an inclusive conversation where the right people are in the room, avoiding confusion and communication breakdowns.
Externally, your business operates amidst fast-moving changes like AI and technology shifts, rapid demographic changes (e.g., labor shortages), supply chain volatility, and major macroeconomic factors (e.g., interest rates). Governance structures provide the necessary framework to respond to these external pressures effectively.
The Board of Directors: the value creation engine
The Board of Directors fundamentally links ownership with the business. Its number one benefit is value creation for the owners.
The Board’s core responsibilities (NIFO: noses in, fingers out):
- Oversight: Holding management accountable for performance, strategic execution, financial health (often via an Audit Committee), and risk management (cyber, insurance, etc.).
- Advising: Providing objective external perspective, expertise, and resources to management.
- Operationalizing: Ensuring the company’s purpose, vision, and values, which come from the owners, are being executed.
Key Board agenda topics:
- Strategy: Defining goals, the plan to achieve them, and holding management accountable for execution.
- Talent: Reviewing leadership bench strength, talent development, and succession planning.
- Risk: Actively identifying, mitigating, and managing all business risks.
Getting started:
- Skills matrix: Determine the expertise your business needs now and in the next five years (e.g., finance, technology, HR).
- Independent Directors: Non-family members bring essential objectivity. Resources like the Private Directors Association (PDA) can help find candidates.
- Board culture: Select candidates based on skills and cultural fit. They must be able to work candidly, collaboratively, and respectfully. Role clarity is paramount: family members serving on the Board must consciously know and state which “hat” they are wearing to avoid overstepping into daily operations.
The Family Council: unifying the family voice
The Family Council is a structure that primarily serves the family circle. It is a formal platform for addressing family-specific matters, whether through a meeting of the whole family or a representative body.
Key purposes and benefits:
- Communication: Fosters directed communication among family members, to the Board, and from business leaders to the family.
- Shared vision: Provides a forum to discuss, align on, and solidify the family’s shared goals and values for the enterprise and assets.
- Education: Educates the rising generation about the business, governance, and business fundamentals.
- Preparation for service: The Council can define the metrics and preparation needed for a family member to qualify for Board service, including professional development, mentoring, and understanding boardroom dynamics.
- Level playing field: It creates a space for equal participation where the business leader is not automatically the family leader, fostering collaboration and providing opportunities for all family members to lead in other ways.
By establishing and respecting these two structures, the Board focused on value creation and oversight, and the Family Council focused on family cohesion and preparation, families gain the governance they need to navigate complexity and ensure the long-term health of their shared enterprise.
