While the term “truth to power” has its roots in dissidents rising up against authoritarian rule, the principle is very relevant in a family governance context.
“Sure we have family governance – we have a board with all of the owners, plus the family lawyer and accountant”. That would have to be the most common and also the worst model for family governance. It’s the knee-jerk response – a family understands that they need some independents on the board, so they make a quick phone call and bring in the family’s most commonly used trusted advisors.
Would families benefit from having those voices around the board table? Of course. Do they provide the independent and external voices needed at the family board table? Absolutely not.
Good governance relies on independent and external people at the board table – that applies to companies, organisations, and families. Service providers like lawyers an accountants usually know the business and the family members inside out, so don’t have a sufficiently external perspective. They are financially compensated for ongoing services provided, which may limit the things they are prepared to say, and makes them far from independent. Finally, they would have formed relationships with the incumbent generation, and may not have as strong a relationship with members of the rising generation. Their presence at the table can reinforce the existing family power imbalance, and be an impediment to open communication.
Open communication is essential for family harmony. Any family meeting has not just the family members at the table, but decades of family baggage. When people speak (if they choose to speak), their message is tainted by family perceptions and dynamics that have built up over time. But everyone’s voice is important, and needs to be heard. The solution is to have an externals at the table (at least the chair) to ensure everyone is comfortable asking questions, speaking up, and thrashing issues out in the open. The last thing anyone wants is for the chair to ask “Any questions”, be met with total silence because no-one wants to say what they really think, and then after the meeting there is a flurry of back-chatter where people actually say what they needed to say.
Effective family advisors have no “skin in the game”, and for an advisor that is a positive. They must straddle a line where they are close enough to the family to understand the context and the family issues and dynamics at play, yet emotionally distant enough to be able to facilitate the family to address their challenges. Effective family advisors are empowered to speak truth to power. They say what needs to be said, when it needs to be said, in front of everyone who needs to hear it.
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David talks about the importance of family advisors being able to say what needs to be said, when it is need to be said in a place where everyone who needs to hear can hear it.
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