Term for When You Worked for Family Business
If y'all're just beginning to investigate how to manage issues at the nexus of family and business, you may have encountered some terminology that's unfamiliar to you. We provide some definitions and explanations here.
This glossary is adjusted from a longer version that is distributed to attendees at Family Business Magazine's Transitions conferences. The version presented hither besides includes some additional definitions.
Board of directorate/Informational board: A group of experienced businesspeople who provide advice to the business leader simply do not take voting authority or fiduciary responsibility.
Board of directors/Fiduciary board: A group of individuals elected or appointed to stand for the shareholders' interests and oversee the company strategy. The board of directors has voting authorization and a legal fiduciary duty to shareholders. Directors accept a duty of loyalty (a responsibleness to deed in the best interests of the company) and a duty of care (a responsibility to brand decisions in good religion and in a prudent manner).
Purchase-sell agreement: This document specifies matters such equally how a shareholder may sell stock, who is eligible to buy it, nether what circumstances stock must be sold (such as in the event of a divorce or termination from the visitor), how the stock will exist valued and how the company would fund the purchase of stock from an exiting owner. These types of agreements help ensure that visitor ownership remains in the family.
Entitlement: A person's belief/mental attitude that they should be given special opportunities and benefits without having earned them. This is likewise often seen in wealthy children who consider themselves to exist special and to merit fabric possessions and extraordinary consideration because of their heritage.
Family: Each family must decide for itself who may have access to certain information, nourish family events, serve on the family council and the corporate and foundation boards, and own stock in the family unit business concern. Are the founder'southward lineal descendants the only ones granted some or all of these privileges? Are in-laws included? Domestic partners? Fiancé(due east)s? Stepchildren? Adopted children? Ex-spouses? Many families include a "definition of the family" among the documents in their family constitution.
Family assembly: A formal gathering of family members to hash out business concern and family unit issues. This meeting, ordinarily held once or twice a year, is generally open to all members of the extended family.
Family unit constitution: A ready of documents that record the family unit's values, hopes and goals as well every bit a framework for how to achieve them. The constitution provides guidance on the activities of the family, the business, the enterprise, the family part and more than.
Family council: A formal governing body that represents the family. It makes decisions on issues that overlap the family and the business and makes recommendations on behalf of the family to the lath.
Family enterprise: The diverse businesses and shared investments, including real estate, endemic jointly by family unit members. A family ordinarily begins with a single legacy business and so, over generations, diversifies into other investments, oft selling their family business.
Family governance: Agreements and shared activities that organize the family to remain aligned in back up of their ventures and investments through multiple generations.
Family unit part: A private wealth management advisory firm that serves ultra-high-cyberspace-worth families. A single-family role serves one family unit. Multifamily offices serve multiple families. Family unit offices can also manage non-financial issues, such every bit travel and household arrangements.
Family values: In a family unit business organisation context, these are statements of what the family and their company stand for and believe. Families typically uncover and enshrine family values over fourth dimension. Documenting and distributing the values to all stakeholders creates behavioral guides for decisions, brand development and family development. Some families create separate statements of family values and business values.
G1, G2, G3 etc.: Refers to the generation of family ownership, starting with G1 as the generation in which the family business concern was founded. Members of G2, for example, are the children of the founder. G3 members are the third generation, a group of cousins from several family branches.
Genogram: A graphic "map" of the family tree, highlighting "entries" and "exits" (births, adoptions, marriages, deaths and divorces) and representing relationships such every bit birth order. A genogram can as well include data almost roles in the family enterprises and causes of expiry, likewise as notations nigh whether relationships are close, conflicted or distant.
Contained directors/board members: Members of the board of directors or lath of directorate who are not family members, company employees, advisers or consultants paid by the visitor, or close associates of the CEO or other key stakeholders.
Married-in: An in-law; i.e., someone who has married into a business organization family unit.
Owners council: Shareholders of the family business concern (or a representative group of shareholders) who meet to discuss their vision and goals for the enterprise and relay that information to the lath with i voice.
Shareholder agreement: A document that codifies issues such as who may ain shares, how voting rights are determined, under what circumstances dividends are paid and how disputes will be resolved. Information technology oft includes a purchase-sell agreement.
Stewardship: The careful and responsible management of something entrusted to one's care; an attitude that 1'southward inheritance should be preserved and passed on to others, rather than used upward.
Copyright 2019 by Family unit Business Magazine. This article may not exist posted online or reproduced in any class, including photocopy, without permission from the publisher. For reprint information, contact bwenger@familybusinessmagazine.com.
Source: https://www.familybusinessmagazine.com/what-it-all-means-glossary-family-business-terms
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