Provided by IFC Corporate Governance
Definition: Also called “Family Forum”, the family assembly is a formal forum for discussion for all family members about business and family issues. During the founder(s) stage of the business, the family assembly is replaced by a more frequent and informal “Family Meeting”. These informal meetings allow the founder(s) to communicate family values, generate new business ideas, and prepare the next generation of the family business’ leaders. As the family and the business get more complex (sibling and cousin stages), it becomes crucial to establish a formal family assembly.
Purpose: To bring family members together so as to reflect on areas of common interest (family and family business issues). The family assembly allows all family members to stay informed on business issues and gives them the opportunity to voice their opinions on business development and other family issues. These assemblies help avoid potential conflicts that might arise among family members because of an unequal access to information and other resources. Family assemblies are usually held about once or twice a year in order to discuss and manage issues of interest to the family. Some of the issues handled during family assemblies include:
- Approval of any change in the family values and vision.
- Education of family members about their rights and responsibilities.
- Approval of family employment and compensation policies.
- Election of family council members (if the council exists).
- Election of other family committees’ members.
- Other important family matters.
Membership: As a general rule, family assemblies are open to all family members. However, some families prefer to set certain membership restrictions such as minimum age limits, participation of in-laws, and voting rights during the assembly. The scheduling and chairing of the family assembly is usually handled by the family patriarch or some other respected family figure. In larger families, this task is usually given to the family council.
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