Board members, executives, owners, vendors, customers — businesses have no shortage of parties to keep in the loop about important developments. But in a family business, that loop tends to be considerably larger, encompassing a family council or family assembly. Often, the families establish a family council (a governance body representing family constituencies) and a family assembly (a gathering of the full family) to smooth the dissemination of information.
We asked several business and governance leaders how they facilitate communication between the business and the family.
How is business information shared with the family?
Lisa Daniel is a married-in member of the family behind South Pittsburg, Tenn.-based Lodge Cast Iron and the education committee chair of the Lodge family council. Daniel says the council's stated vision “is to encourage a deeper understanding of the history of our founder and company, to establish closer family ties between descendants and their families, to build harmonious relationships between the company and the various generations of family members and to act as an open channel of communication between family members and the board of directors.”
As part of its education program, the family council presents annual company updates from the CEO that provide a general overview of the state of the company and the state of the housewares industry, according to Daniel.
“This information has been curated to remove specific financial data and other items that may be considered privileged shareholder information,” she says. “This session is in addition to the separate board-managed communication to shareholders who also receive quarterly president's reports and an in-depth annual shareholder meeting.”
Daniel says the family council also looks for other information that can be shared with all family members to encourage engagement, such as news about upcoming product launches, company milestones and charitable contributions.
At North Berwick, Maine-based Hussey Seating Company, the business provides an annual report to the family assembly, who are also invited to an annual meeting with the board and senior management, according to Board Chair Letitia Hussey Beauregard.
But a newly implemented change to the family's governance structure means communication between the business and the family council, which represents the family assembly, will now be more frequent.
According to Beauregard, the business has both a Class A shareholder group and a Class B shareholder group, and those groups receive a monthly memo from the CEO that provides updates on the business, including sales and revenue information. Beauregard explains that the shareholder groups were very recently folded into the family council as a shareholder committee.
As for the means of communication, most business information is disseminated to shareholders and the family assembly via ShareFile, a secure, cloud-based file-sharing and storage platform, Beauregard says.
Similarly, at Toronto-based Sorbara Group of Companies, according to Vice President of Corporate Knowledge Christina Sorbara, business information is shared via password-protected email with the family council. That information includes high-level numbers, such as cash flow projections; status updates on various company projects; information on charitable contributions; and quarterly updates from all of the group's companies and departments.
Sorbara says determining what information should be shared with the family council was an organic and gradual process that is still evolving.
In her role, Sorbara assesses the information being prepared at the board level to determine what might be beneficial to pass along to the broader family.
“A lot of what I work on is saying, ‘OK, communication-wise, what would make someone who's not on the board and maybe not getting all the information feel connected?”
Sorbara says she's also constantly picking up new communication ideas from other family enterprises.
“I was with one investment firm and they said they worked with one family business that has a monthly family forum and I just liked the name, so that’s what I implemented,” she says, explaining that those meetings focus on education for shareholders, as well as presenting an opportunity to gather feedback.
At Sycamore, Ill.-based IDEAL Industries, information is shared with the entire family assembly, which includes family council members, according to Mary Nicoletti, who serves as both family council director and family council chair. Typically, that information includes updates on business performance, board happenings, finance and family governance.
“Each year, our family governance team develops a comprehensive multi-pronged plan for communicating to the family about IDEAL,” Nicoletti says. That plan includes providing updates from the company's legal, tax and wealth management advisors, as well as information on family governance, learning/development opportunities and other assets the family owns.
The company disseminates information to the family via a wide range of channels, including:
• Biannual in-person (with an option to attend virtually) family assembly meetings in the summer and fall (typically includes a day of education, a day with the IDEAL executives/business updates, and a day to work on family governance projects)
• Quarterly family board books
• Quarterly business and board debrief with the CEO and chairman (virtual, via Zoom)
• Quarterly financial updates and education sessions (case studies) with the CFO (virtual, via Zoom)
• Monthly family e-newsletter, The Connector, that includes business updates, family governance updates, family updates (birthdays, family news)
• IDEALines, a quarterly print and electronic publication that was started in 1930 and is put together by the company. It is distributed to employees, family, retirees and the community. Its content typically includes a general message from the CEO, IDEAL headlines, business unit updates, earned media and milestones (anniversaries and retirees).
• Starting in 2025, the company will publish an annual report that will also be shared with the family.
How is feedback gathered from the family?
Family businesses hear from the family through both formal and informal modes of communication. And no two families are alike when it comes to which methods are most effective.
At IDEAL, for example, feedback from the family is shared in a variety of forums: in person and via email, as well as during the quarterly Zoom sessions with the CFO, CEO and chairman, Nicoletti says. The company also conducts periodic focus groups, virtual family council meetings, task forces and occasional surveys.
And at Lodge, according to Daniel, each quarterly family council meeting begins with a “family forum,” where any family member can share anything that is on their mind.
“Things shared here typically contain ideas for future events or sessions and suggestions for improving communication or engagement,” Daniel says.
At Hussey Seating, Class A shareholders meet via Zoom with the CEO and other members of the senior management team after each quarterly board meeting. During those calls, the Class A shareholders are permitted to ask questions. Beauregard says the company is now starting to allow Class B shareholders to join the calls as well, but only to listen in.
Otherwise, Beauregard, as board chair, is the main point of contact for family members who have questions about information the business sends out.
Sorbara, meanwhile, has found the more structured methods of garnering feedback to be lacking. Instead, she relies on verbal feedback through casual conversations with family members.
“I do a lot of it just by talking to [the family]: ‘What did you think of that meeting?'” she says.
Whenever she notices a theme in those conversations — family members seeking more information or transparency around a certain issue — Sorbara goes to the board to brainstorm how to address the need.
“I've got my ear to the ground to try and slowly make some changes where I can.”