LGA works with families and the professionals who serve them in a variety of organizational settings. Over the past decade we have advised families in over 30 countries on 6 continents. Our typical clients include multi-generational families who govern operating or investment companies with revenues between US$500 million and $200 billion or more. Some are closely held and others are publicly traded. We also have an “Emerging Enterprises” client group whose revenues range from $50 to $500 million, most often governed by founders and sibling partnerships.
While many of our client families are owner/operators of one or more businesses, others are engaged in family offices, private trust companies and holding companies, and foundations. We also serve private banks, financial advisors, consulting firms, associations, and philanthropy networks.
LGA IS INTERNATIONAL
In these institutional relationships we provide staff development and education on family governance, as well as joining our colleague organizations to offer direct services to their client families.
We take confidentiality very seriously and do not share the names of our clients.
However, see below for illustrative case examples of our typical engagements.
We most often work with complex enterprises that have been in the same family for more than one generation. They may be led currently by partnerships of siblings or cousins, or planning a transition to such a partnership.
Recent case example: A U.S. company in the food services sector was anticipating the retirement of the eldest brother in a three-sibling partnership that had led the company since the founder’s death 15 years ago. Three cousins from the third generation were also working in the company. Performance reviews of the successor candidates were informal and incomplete. The spouse and children of one of the younger sibling partners were raising the possibility of cashing out, which was met with anger from the other branches. An existing family council met irregularly and was not seen as able to help with the process. The strong board of directors was not sure what role to play in encouraging timely and constructive discussion of alternatives and plans.
Following a comprehensive “Continuity Audit,” the first year of our work included restructuring the family council as an effective forum for discussion of different paths, and the adoption of a new shareholder agreement and family constitution. A team of financial and legal advisors presented a set of restructuring and liquidity options. Over the following months, all 11 members of the cousin generation participated in a career development program that led to a succession procedure for those who were candidates to eventually take over as owner-leaders.
An increasing sector of our advising work is with family businesses that have family control but complex ownership, as publicly traded corporations or through intermediate steps of private equity placements and joint ventures. These systems require sophisticated governance solutions to challenges of board structure and process, leadership continuity, and family involvement.
Some family offices are stand-alone structures that oversee collectively-owned assets (such as real estate or investment portfolios) after the sale of an operating company, providing basic legal, financial, investment, security, and taxation services for family members. In more complex cases, the office is closely tied to a family business, a family foundation, trusts, and similar structures, requiring coordinated planning.
Recent case example; After two generations of family ownership, a Latin American manufacturing company sold out to a foreign conglomerate. The family leaders sought help in talking with the broad family about the opportunities, costs, and risks of keeping the assets together. The family office, which had been only a group of service providers for legal, tax, and investment advice, was seen as the best structure to support continued collaborative governance, but no one had any ideas about how to organize it now that the operating company hierarchy was gone.
The initial work was to convene a series of sub-family and extended-family conversations about goals, concerns, and “dreams.” These broad-ranging discussions led to a Family Constitution (‘Protocolo’) that covered both the architecture and the process of collaborative investing and support for new entrepreneurial ideas. The family office also greatly enhanced its services to family members of all generations, overseen by a family council that acted as the office board of directors.
Many families have a strong desire to use some of their wealth for the benefit of others, to give back to their community or to support a cause that is important to the family. Family foundations are one effective and tax-efficient mechanism for organizing collaborative family philanthropy. We assist family foundations in strengthening their governance structures and processes, and developing leadership for continuity. We also work with families on other expressions of their philanthropic agendas: individual giving, donor-advised funds, venture philanthropy, corporate giving, and the integration of all of these activities in service of a coordinated, strategic, and multi-generational philanthropic effort.
For many families, their bankers, trustees, and investment managers are their most trusted advisors, but few of those professionals have a background or training in family process and governance. We organize seminars for bankers, law firms, financial advisors, executive recruiters, wealth management consultants, and accounting firms to help them better understand and serve their family clients. We also provide educational forums, “next generation” programs, and consultation directly with their client families.
Many large manufacturers have networks of franchisees and dealers that are family businesses. The interdependence between the parent corporation and the private owners of distribution businesses creates dilemmas of control, planning, strategy, and growth. LGA designs educational and consulting programs for the dealership-owning families about leadership and succession. We also advise both the dealers and the manufacturers on managing their relationship for mutual benefit.
We offer presentations or seminars on family enterprise and philanthropy, and we also work with forums, universities, trade associations, or advocacy groups to organize programs for family business owners, design courses and research programs, or conduct policy analysis. Our primary affiliations are with the Kellogg School of Business and the Yale School of Management, but our partners and associates participate in executive education programs sponsored by universities and associations around the world. Over the past year, members of our group have taught workshops and courses at:
- Kellogg School of Management
- The International Institute for Family Enterprise in Egypt, Bahrain, and Dubai
- University Forum programs in Wisconsin, Virginia, South Carolina, Massachusetts
- Family Firm Institute
- Family Office Exchange
- National Center for Family Philanthropy
- Family foundation conferences
- NEXIA Foundation, Barcelona, Spain
- Latin American Family Business Forum
- Family Business Network