EMPRESAS FAMILIARES

Our starting point is the firm assertion that governance plays a fundamental role in all organizations.
In family businesses, we find peculiarities that, if not well understood, can frustrate the implementation of the intended governance system. The delicate point is to consider that, in the face of frustration and weariness, potential barriers to future processes may arise. A frustrated process, therefore, can compromise the genuine and legitimate effort to improve the company's practices by delaying its adaptation to higher competitive levels.
To facilitate our brief journey in this article, let's divide the implementation process into five stages: Diagnosis, Demand Mapping, Structure Evaluation, Inflection Point, and Board Model Selection.
In the Diagnosis phase, we need to deeply understand the company, its history, and its people. Differentiate between those who own and operate the company, those who only own it, and those who neither own nor operate it but are in senior management. What seems simple can become very complex. Roles are not always clearly defined, especially when we talk about family businesses. Knowing which generation the company is in is also very important, as it will show whether the family has already successfully navigated a leadership transition or if this will be their first experience. Discover if there are any explicit or implicit conflicts between family members and partners. Confirm whether a successor has already been appointed or if the selection process is still underway. Furthermore, it's important to know if the successor or successors are prepared and genuinely interested in this responsibility. Knowing the existing formal agreements, such as the family protocol, shareholder agreement, and articles of association. And finally, verify if the company has a clear purpose for its existence, as well as its vision, mission, and values.
In Demand Mapping, we need to know exactly what the company expects to solve or strengthen with the implementation of governance. There are several paths that can be chosen and even combined. The main ones are: succession, growth, conflict management, improving management practices to enhance business value, asset preservation, and longevity, among others. The map will be very useful, especially when deviations from the route occur during the process, consuming time and resources for everyone involved. The presence of advisors should bring serenity and assertiveness to this stage.
In the Structure Assessment, it is fundamental to understand the already implemented governance routines, so that they can be validated or revised for better functioning. Checking the minutes of meetings held is a very important point, as it will reveal, among other things, the quality of the debates and trends in decision-making. The minutes tell a story that may assist the advisors in conducting future work.
At the Inflection Point, it will be possible to determine if the decision is timely, that is, if it is time to structure or restructure governance. Points that can be explored at this stage are: increased complexity in the business or family structure, the entry of new partners with the power to influence decisions, mergers, deterioration in corporate or family relationships, and, most importantly, the founder's vision if he or she is still involved in the structure. Does the founder fully agree with the process? Will you withdraw completely or just reduce your involvement in management? Do you want to join the council?
In the Model Council Selection, we can have various compositions. We should begin by evaluating the company's size and characteristics. A publicly listed company, for example, will already be operating with a Board of Directors that complies with the Brazilian Corporation Law (Law No. 6.404/1976) and its amendments. If not listed, the company may also opt for a Board of Directors to prepare for an IPO, for example. In situations where the focus is solely on succession, a Family Council can be structured to organize family relationships, assets, and the succession process. The Advisory Council, in turn, is strategic and can serve well in all scenarios, regardless of the situation. After all, the focus of the Advisory Board is strategic advice, bringing an external perspective that will contribute to assertive decisions.
We must understand that the decision to implement governance in family businesses is not as straightforward as in other types of organizations. The feelings involved in the founding, the acquisition of the first clients, the change in social status through the company's success, titles earned in the market, and the generation of wealth can all affect the process. Furthermore, mindsets can hinder the process, adding an extra challenge to the advice. Quotes like: I've always done it this way! They can participate in the meetings.
Typically, we will see the implementation process of Governance initiated during periods of crisis, where relationships are no longer comfortable. Family members with health problems, divorces, or conflicts due to differing ideologies are some of the factors that can increase tension. Therefore, the responsibility of implementing an efficient council will require that its members be carefully selected. In addition to technical skills, they must also be distinguished by their renowned soft skills. Advisors with high emotional intelligence can be decisive in this type of process.