"The most successful companies are family businesses, as long as they learn to manage personal conflicts" J. Davis.
"The problems faced by the Family Business are exactly the same as those of the corporate companies, only the family problems are added to the former" S. Antognolli
There is only one way to lessen the impact of these problems, and that is by establishing forms of government. Family - Property - Company
The Family Council was born out of the need for a collegiate structure that adequately manages family harmony, but the reality in our family SMEs is different.
In general terms, in our Nicaraguan SMEs, the directors are the founder or founders of the family business, whether single-family or multi-family. It is the owners who make the decisions on how to solve the problems with the relatives who are not giving the expected results and unfortunately rarely give correct solutions, this is because they are also immersed in the problems that arise and, generally, they they are part of the problem for not having adequately conveyed their expectations.
It is easy to make the decision to fire a collaborator who is not giving the expected results, but how difficult it is to do when this collaborator is familiar and the greater the emotional bond, the more difficult it will be to make the best decisions for the company.
Both family harmony and company profitability are at stake when family members join the company, but who better than a family member to take care of the company's assets? Therein lies the difficulty for founders in making the best decisions for the company.
When a problem arises with a family member, be it low performance, contempt of the provisions of internal regulations, inappropriate use of company assets, etc. the founder plays a crucial role and is the only one who can solve the problem. However, usually he cannot and, under that powerlessness, he decides to put the problem to rest and wait for it to resolve itself.
The founder is immersed in the problem, since he is judge and party. It is about firing a collaborator with low performance but who is also his son, nephew, brother, brother-in-law or even father. It is his turn to think with his right hand in his pocket and with his left in his heart, leaving him without hands for conscience, and he has to make solomonic decisions that are rarely seen in these times.
What is the solution? The Family Council.
As Eng. Santiago Antognolli explains in his article, “ the Family Council is the governing body that regulates the family's relations with the other two sub-systems. It is made up of all family members who have a relationship with the company, whether or not they work in it. He is the one who draws up the document that regulates all the activities and relationships of the Family business The Family Protocol. ”
Likewise, in conferences he explained to us that "the mission of the family council is to seek balance both in relations within the family and in the relations of the family with the company and property."
Describing it in another way, he is in charge of dismissing that son, nephew, brother, brother-in-law or even father, who is not performing properly, the Family Council is the executioner of family businesses and that is why I consider it relief for the founders.
Therefore, the Family Council is:
… the person in charge of avoiding that the decisions of the company are concentrated in a single person or a family nucleus, reducing importance to what others think.
… the one who lectures, reprimands or even punishes family members who affect the profitability of the company or damage family harmony with their actions.
… The most important governing body of the business family, although it is not the one that makes the operational decisions of the company or the investment of the property.
The Family Council ensures the family harmony and profitability of the company, but its role is not so complicated, but rather, it is simplified when the following elements are combined:
- Family Protocol, agreed by all the family members who work in the company, where the rules for the behavior of family members and the way to solve problems before they happen are established. Family Council, made up of impartial family members who are interested in maintaining balance. between family harmony and the profitability of the company. Wise advisers, able to give up their place when they are affected by a particular situation, avoiding being judge and party.
The founders who know how to take advantage of the Family Council, manage to rest in the most difficult decision-making in the business family. Decisions, no matter how hard they may be, no longer focus on what the founder wants or does not want, but on what is best for the family-owned business, his role goes from being independent to interdependent, relying on those key people in the family business, even if they have no part in the property.
The relatives who are affected by the decisions of the Family Council, have no arguments to go against the founder, be it father, brother, brother-in-law or uncle. They know that the decision made was collegial and based on what was previously written in the Family Protocol that they themselves drafted. Family members know that the consensus that is obtained and the decisions that are made are based on objective foundations, eliminating the possibility that counselors think with more emotion than reason or vice versa, removing the right hand from the pocket and the left from the heart.
