Governance Structure, Policies, and Process

While a strong Board of Directors may be necessary for managing a complex family business, it is not sufficient. Cooperation and trust in the enterprise depend upon having supportive family members and shareholders who have forums in which to voice their distinctive interests and concerns.

LGA’s work in governance focuses on the architecture of Boards of Directors, Family Councils, and Shareholder Assemblies. We help clients understand the fundamental purpose of these three forums, and we assist in customizing the structure of each to fit the family’s requirements. Following the Continuity Audit, our work on governance begins with helping the family identify the current and future needs of the system:

• Helping family members to think strategically about governance and understand the interrelationship among all the entities that make up the system, including: the Family Assembly, the Family Council, the Board of Directors, the Family Office and the Family Foundation.
  
• Evaluating the best composition for the Board of Directors, creating profiles for family and independent directors, and designing  strategies for recruitment.
  
• Developing policies for Board participation (such as term limits, compensation, and relationships with management) and designing the structure of board committees.
  
• Designing a Family Council and training family members to work effectively in it.
  
• Organizing Family Assembly meetings.
  
• Specifying the tasks and responsibilities of each governance structure and the mechanisms for them to work together effectively.
  If structures are the engine of governance, the oil needed to make them function smoothly is governance process –- no oil, no movement. LGA’s work places tremendous importance on helping families to work effectively within the structures they create. More specifically, we may assist by --
  • Training family shareholders to develop a sense of stewardship toward the enterprise and understand the rights, privileges, and responsibilities of ownership.
  • Coaching younger family members on their duties and responsibilities as directors.
    
  • Facilitating meetings of the Board, the Family Council, and the Shareholders’ Assembly.