A family council can be the engine of your family's future success

Conflict in families is unavoidable - and is not necessarily a negative. A lack of conflict doesn't always mean there's agreement; sometimes it just means there's apathy, which can be even worse. But conflict needs to be managed as one piece of a larger process called family governance.

Many families find that the first requisite of family governance is a normative framework within which significant decision may be made - a framework called a family council.

For many, the essence of family governance is finding a way to make decisions the entire family will respect. And that's where a family council can make a difference as decisions are made though a transparent, rule-bound process. When a family makes decisions that way, and does so over a period of years, the council ultimately gains increasing moral and persuasive force, until its authoritative impact can become almost unquestioned- an extremely effective way to manage the potential for devastating family conflict.

Here are a few questions you need to address in the process of creating a family council.

How many seats should be at this table? There can be an infinite number of subtle variations, but basically there are two types of family council structures: a true one-person/one vote democracy, and a representative system, in which a handful of family members are elected to make decisions on everyone' behalf (or serve by virtue of a certain attribute, such as seniority).

You may get more buy-in if everyone has a vote. But as a family grows, a system in which everyone votes on every issue may become unwieldy. One smart strategy can be to transition to a representative system after a full-assembly council has set up the basic rules and built a track record of effective and widely accepted decisions.

Will our council be composed of family members only? Placing one or more family outsiders - attorneys, investment counselors or other trusted advisors - on your council can bring an independent voice into deliberations. It also can be a subtle but effective way to keep everyone on his or her best behavior.

Should children be seen and heard? There's no better way to prepare the next generation for future responsibilities than be letting them watch their elders work through challenging issues - besides, they may inject a fresh perspective. Many families have success with a tiered structure in which, for instance, family members begin to attend meetings as observers at age 18 and become full voting members at 21.

The family council can be one of the tools the family uses to groom and identify its future leaders, and it can be the first formal setting in which cousins and more distant relatives learn to work together for the benefit of the extended family.

And what about spouses? It's natural to value the opinion of longtime family members over that of a newcomer. But letting spouses fully participate fosters a spirit of openness and recognizes the contribution that in-laws make to a family's culture- and it may prevent dysfunctional alternatives. Many families conclude that it's better to give spouses a forum to get those views out in the open, because they ultimately will find expression, one way or another.

Does majority rule? While consensus decision-making is very difficult, it is the most powerful and unifying way for families to make decisions. The alternative - decision-making by majority vote - is easier, but it creates winners and losers.

How should we get started? Ease your family council into action slowly and modestly. The family council controls its agenda, so pick out matters that are relatively easy and, to the extent possible, not emotionally charged. Practice on the easy ones, get them under your belt and build a record of success. Over time, the success of the family council becomes self- perpetuating and reinforcing, until it gets to the point where it assumes an extremely powerful place in the ethos of the family.

When done right, the family council can become not only the vehicle by which family conflict is managed (as important as that is), but also the chief organized forum for articulating and implementing your family's values, mission, vision and goals.

The family council can be a robust and vital family institution, and the engine of your family's future success.

• For more information on family councils, please call me at 689-8704 or e-mail me at William.a.creekbaum@smithbarney.com.


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