Effective governance in a 3rd generation UK retail family enterprise
The importance of process, communication and engagement
Deloitte’s Family Enterprise Consulting team assisted a 3rd generation UK retail family business to formalise their board meetings and improve communication to shareholders. Deloitte’s expertise in both corporate governance and family governance was crucial in delivering a successful outcome to the client.
Deloitte’s Family Enterprise Consulting team were engaged by a 3rd generation UK retail family to assist with the development of appropriate governance structures. Despite having a large, complex business, the client had no formal board arrangements in place, and there was a lack of discipline during family meetings.
Additionally, family disagreements were starting to slow down business decision making, and information was being disseminated to family shareholders in an inconsistent way, resulting in some shareholders feeling disgruntled and unengaged.
To address the problems above, the Family Enterprise Consulting team:
- Worked with the family to establish and populate a board, before interviewing each new board member individually to understand their perspective on the situation;
- Prepared a set of proposals for formalising and improving the efficiency of meetings;
- Attended several board meetings to facilitate discussion between family members and encourage effective communication;
- Planned an information sharing and communications strategy that engaged with family shareholders in a systematic way, including involving the next generation;
- Chaired the first annual family meeting, and facilitated conversations between family board members and non-business family shareholders.
Establishing a board with clear protocols substantially improved communication between the family’s decision-makers, making meetings became more disciplined, efficient and productive.
Information flows to non-working family shareholders were also improved and regulated, meaning all family shareholders had equal access to information, regardless of involvement in the business. Additionally, by involving the next generation in the communications plan and giving them access to knowledge about the business, the family laid strong foundations for dealing with the possible future challenge of succession.
These overall improvements in communication were manifested in the first ‘all party’ family meeting held by the family, attended and enjoyed by all family shareholders.
Our expert says…
‘Effective communication is something many families struggle with, especially when matters are complicated by different levels of involvement in a shared business interest.
In such situations, having an awareness of (and managing) the overlap between family matters and business matters is key. Establishing appropriate forums for the discussion of each, such as family councils and family business boards, can help with this.’
Alexandra Sharpe, Partner, Family Enterprise Consulting
Find out more
To learn more about improving communication in your family enterprise, get in touch with our Family Enterprise Consulting team.
For further insights, read our weekly Family Enterprise blog.