Confronting the Unspoken: Why Difficult Conversations Are the Cornerstone of Family Governance
Family enterprises operate at the intersection of emotion and business—often with explosive consequences. Avoiding critical conversations about succession, governance, and expectations may feel like self-preservation in the moment, but it ultimately undermines the family’s ability to sustain its enterprise across generations.
Governance Is a Family-Wide Responsibility
When we think of family governance, our minds often go to the business—its board structures, management policies, or succession plans. Yet governance spans far beyond the operating company. It encompasses wealth, philanthropy, and, most importantly, the family itself. Without clear expectations and open communication, every one of these areas can become a source of conflict.
The avoidance of difficult conversations is often the root cause of these conflicts, preventing families from establishing governance that supports long-term success.
Avoiding these conversations leaves families vulnerable to common conflicts, such as:
- Access to Capital: Disagreements on how funds are allocated for business or personal needs.
- Ownership Transition: Uncertainty about when and how ownership will pass to the next generation.
- Family Employment: Tension over who can work in the business and under what conditions.
- Ownership of Family Assets: Disputes over control or distribution of shared properties.
- Leadership Succession: Emotional struggles over deciding who will lead the business.
- Generational Alignment: Misaligned priorities between the Now Gen and Rising Gen.
Engaging in these conversations allows families to establish governance policies—such as distribution policies, buy-sell agreements, family employment and in-law policies, prenuptial agreements, and family constitutions. These frameworks create clarity and help avoid conflict by putting policies in place before things become personal.
Advisors: The Facilitators of Change
Families aren’t alone in their avoidance; advisors often hesitate to confront hard truths, fearing conflict or even losing the relationship. However, as trusted guides, advisors have a responsibility to create safe spaces for these conversations. It’s not enough to develop strategies or draft policies—facilitating dialogue is just as critical.
To be effective, advisors must adapt their approach to the audience. Different generations and family members hear things differently, and successful communication requires tailoring the message to each person. At the same time, consistency is key. Transparency and a shared understanding among all parties form the bedrock of effective governance.
Addressing the Hard Topics
Families often avoid conversations about succession planning, wealth governance, and expectations due to cultural norms, fear of conflict, or a reluctance to appear ungrateful. Yet delaying these discussions only leads to ambiguity and future discord.
For example, many leaders delay succession planning, associating it with their own mortality. This hesitation leaves the Rising Gen uncertain about the Now Gen’s intentions, creating frustration and making it difficult to plan their own roles within the family enterprise (or outside of it). Reframing succession as an ongoing process rather than a one-time event fosters collaboration and shared purpose.
Similarly, money is often a taboo topic. Families may avoid discussions about wealth, inheritance, or financial responsibilities, which can lead to misunderstandings or false expectations. Advisors can play a crucial role by encouraging Now Gens to embrace transparency, helping to prepare the Rising Gen for their future roles and responsibilities. They can also help families think through structures that provide support and guidance while avoiding the risk of “spoiling” the Rising Gen, fostering a sense of accountability and stewardship.
Best Practices for Difficult Conversations
Whether you’re a family member or an advisor, the goal of a difficult conversation should be alignment, not confrontation. Some best practices include:
- Give Advance Notice: Inform participants about the conversation topic and set a neutral location for the discussion.
- Define the Objective: Focus on a shared goal to keep the conversation value-driven and productive.
- Reframe the Question: How a question is phrased can significantly alter the message it conveys. For example, instead of a member of the Rising Gen asking the Now Gen, “What’s in your will?” they could ask, “What are my responsibilities when you’re gone?” This shift reframes the conversation from one of entitlement to one of stewardship and support, fostering a more productive dialogue.
- Listen and Be Vulnerable: Approach the discussion with empathy and openness to foster mutual understanding.
- Establish Action Items: Assign clear roles and responsibilities to ensure follow-through.
Governance is not a one-time task but a continuous process. Avoiding these conversations does more than delay decisions—it threatens the cohesion of future generations.
Building a Lasting Legacy
Governance empowers families to align their goals, avoid unnecessary conflicts, and ensure sustainability. Families and advisors who embrace these conversations lay the groundwork for stronger relationships, clearer governance, and enduring legacies.
Policies before it’s personal—this principle underscores the importance of addressing challenging issues proactively. Engaging in these conversations is difficult, but it is essential for safeguarding the future of family enterprises.
Let’s keep talking. Thriving multigenerational enterprises are built on clarity, communication, and the courage to address the unspoken.
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