Families Run as Corporations

The truth behind family governance.

The Management (Dad), responsible for short term results, reports to the Board (Mom) who looks after Shareholder’s (Kids’) interests.

Board (Mom) monitors Management (Dad’s) performance at all times to secure Shareholder’s (Kids’) expectations are met.

This is a natural order per se.

Similarities with the corporate world are straight forward.

Kids do not understand very well the nature of the family ‘corporation’. They typically feel closer or more comfortable with board level relationships as they lack sufficient understanding or judgement on how management operates.

The underlying rules regulating how a family structure works, including incentives, rewards and penalties, roll down from the board (Mom).

The difficulty is, there is not a ‘legal’ framework to ultimately rely on. Commitments and relationships have to be built upon trust, based on a profound understanding of the vision, objectives, constituents’ interests and an incredible ability to assess short term performance and execution.

What is amazing here is that, what takes a career lifetime for others to develop those competencies and become a Board Director, comes naturally to Moms.

Kudos to all Moms for the job they do.

…I should leave now, have to prepare lunch for the kids and do the dishes afterwards.

@efernandez