Alicia Gerrits de Sola is a family member and trusted advisor to her family's El Salvador-based enterprise, Grupo de Sola. As part of the fourth generation, she explains the family's approach to governance. She also shares her thoughts on the challenging and rewarding process of including the family in decision-making for the 127-year-old family business:
How is your family enterprise structured?
Our two main legacy businesses are coffee and real estate development. We also hold a portfolio of passive investments in companies and funds in Central America and abroad, designed to offer the group a measure of diversification of risk and opportunity.
When it comes to the family's ‘voice,' I would say it is heard more clearly when we are discussing our main operating businesses. Though results are presented and discussed periodically, family conversations tend to revolve around our values, the importance of how we treat our partners, management and communities in which we do business. Results are our priority and focus, but it's how these results come about that draws much of the family's attention.
How have you set up family governance?
For decades, we've hired experienced family business advisors, studied and emulated best practices from those who have successfully dealt with issues of governance, succession, family unity and the like. The challenge has been to take these concepts and translate them to fit our family and the next gen. There's no right answer, of course, but there is always a ‘better answer.' It's a conversation that requires aggressive patience, and a willingness to try and fail, but it has been worth it.
Each of our operating companies has its own board of directors with both family and non-family members, and the Group has a sort of ‘super board,' also with trusted and respected non-family directors, that influences and oversees all of these. When it comes to big decisions, this board gives an independent recommendation, which the family strongly values. Having said this, the family shareholders and/or representatives are the ultimate decision-makers in all major matters. Most importantly, it has been critical that the governance structures not let the family members lose sight of the fact that they are part of a long line of stewards of the enterprise.
In our experience, properly structured and practiced governance is critical to facilitating decision-making in an efficient and timely manner, but that is only part of the equation. Healthy family relationships and a clear vision are equally important when it comes to keeping the ship on course. As the official voice of the family shareholders, we structured a Shareholder Council, made up only of family members. Over the years, those representing their respective groups have gotten more involved and have a better understanding of the businesses and their needs. They can dive a bit deeper into the issues facing the individual companies and offer their informed feedback, from their families' perspectives.
The Shareholder Council is now primarily made up of fourth-generation members and, as they get involved, they too have become more familiar with the businesses and now feel comfortable asking relevant and substantial questions about investments. We haven't yet looped our fifth generation into the governance structure, but it's in the works.
How did you develop this system of governance?
As the family has grown and evolved over the years and generations, there have been different styles of leadership in the group. In the past, our leadership was much more traditional and hierarchal. Today, our governance is much more inclusive and collaborative. It was a lengthy and enriching process to get past the ‘business as usual' format and become an inclusive family system, but we have found a good deal more of buy-in when everyone is conscious of, and feels responsibility for, the decisions we are making.
I remember one day in particular — many, many years ago — before I was involved in advising on governance. Third- and fourth-generation members met, and we all walked into a room to learn about the businesses. I clearly remember that nobody uttered a word. We talked before the meeting and we talked after the meeting. During the meeting, there were only a few management presentations, and no back-and-forth whatsoever. When we walked out that day, I noticed everyone was abuzz talking about the presentations, and the energy was high. That's when I realized we had a real opportunity to include the family's voice in the system.
So, the challenge for the next few years became creating a system and an environment where family members felt comfortable bringing those pre- and post-meeting conversations into the room. You can imagine, it was a big learning process for everybody, but with some patience and skill-building, family members began finding their voice, and we eventually developed an active, interested group excited to ask questions and offer feedback — all in an effort to craft a collective vision for the group.
Today, I'm proud to say that we encourage discussion and differing points of view. We know that every family member, like in any other business, has different priorities and areas of interest, and that's OK. Our family has grown so much through this process, and to see this leap forward in my generation is very rewarding.
What have you learned about effective governance by making this transition with your family?
Meeting preparation has evolved over the years. Our family now receives presentations and updates before the meetings so they can arrive at meetings prepared to share, learn and discuss with other family members.
Some family members are more visual, and others like more text in the presentations. Some prefer a more condensed version and others more lengthy presentations. The reporting for the family is different than reporting for management or business partners. So, although the family always has access to everything that is produced, there is a special reporting style developed so that information can flow more freely and easily.
How are you working to preserve your family's legacy while looking to the future?
My priority right now is finding the voice of the family woven through the generations: how we sync up our priorities, values and mission and everything that we've inherited, and then interpret that message for today's world — where we are today as a family.
We recently found some letters from our founder, my great-grandfather, written to his sons, the second generation. In them, he talked about putting family first — family as a priority. One passage reads, ‘If I have been successful in my life, that is attributed to various causes: the first and foremost, the solid training and principles my parents and grandparents have given me.'
I hear my great-grandfather speaking to me today and saying: ‘You go where the opportunity is.' I tell my children the same thing: Do not copy and paste what I've done with my life or the business as it is today. Times change, things change, circumstances change. So, my interpretation of my great-grandfather's message is, hold family first, practice our family values, and then go where the opportunity is.
