Some regular readers may be getting a bit sick of reading my take on the subject of Family Governance. Well this week I’m going to revisit this important subject, but with the help of someone who has decades more experience with the matter.
I always want to share more on Family Governance, but this time I’ve got the wisdom of Barbara Hauser on my side, so you can all benefit from her work with families on several continents.
The source of the background for this post is an article I saw online in March, from CampdenFB.com, written by Hauser. It, in turn, is an excerpt from a chapter that she wrote in the recent book, Wealth of Wisdom, which I also highly recommend.
Making Decisions Together
What are the best ways for a family to make decisions together?
Great question, isn’t it? I think so. It’s also the title that Hauser chose for her post, and Chapter 28 of Wealth of Wisdom, which was her contribution to the book.
My readers will hopefully recognize the aspect of decision-making that I typically cite as one of the three main components of Family Governance (along with communications, and problem-solving). See Family Governance – Do It Yourself?
Go Read It for Yourself
I will come right out and recommend not only that you read the CampdenFB.com story I linked above, as well as the entire Wealth of Wisdom book.
But now I need to segue this post into the “three universal principles” of good governance that she outlines for families to follow that I teased in my blog title.
Let me list them here first, and then I’ll give you my take on them one-by-one.
Hauser states that three key elements you’ll want to ensure you have are:
Transparency, Accountability, and Participation.
Transparency: Everything Above Board, Please
Family governance is all about how things are taken care of for the larger family group, and typically involves smaller groups of people doing much of the work and making many of the day-to-day decisions on their behalf.
These situations always result in what I like to call an “Information Asymmetry” i.e. a few people know A LOT about what’s going on, while many people know VERY LITTLE.
The most important thing to keep in mind is that this asymmetry can make those on the “I know very little” end of things uncomfortable and perhaps even suspicious.
As an antidote to suspicion, it behooves those on the “I know a lot” side to be overly transparent in everything they do.
Better to “overshare” to the point where they feel like you are bombarding them with detail, than to “undershare” and have them think you are hiding anything.
Accountability: Do What You Promised (Or Else!)
Being accountable to the group is the next key principle that follows on perfectly to transparency. Not only do those who are taking care of things need to be upfront and above board with the things that they are doing on behalf of the other family members, they actually need to be held to account for the results.
If certain people are being trusted by others to represent them, there needs to be an occasional “accounting” of their performance.
If results are sub-optimal, explanations are warranted, and continued underperformance should naturally raise possible questions of fitness for the task.
As long as group members can see what those at the helm are doing, and that there are opportunities to discuss results, things typically run smoothly.
Participation: Hey, I Want in On That Too
Hauser’s third principle of Family Governance is Participation. Again, it flows nicely from the previous one.
Imagine a scenario where performance is not up to expectations. Other family members might rightly want to be able to be involved at a deeper level, if they feel that they have a contribution to make.
Of course this principle involves more than simply having a line form to take the place of those at the helm.
Simply being invited to take part in any discussions around transparency and accountability also count towards participation.
Start Small, Let Things Evolve
I really don’t like to scare people when I talk about the importance of Family Governance. It doesn’t need to start out as a big deal. Put a few elements in place, and allow things to evolve slowly form there.
That reminds me, you may also want to read The Evolution of Family Governance!
