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Family Enterprise Consulting
Helping family businesses flourish
- Key contact
- family enterprise succession planning
- next generation leadership development
- family governance creation and review
The Deloitte Family Enterprise Consulting team works with family enterprises to help them flourish across generations, both from a commercial and a relationship perspective.
We assist with succession planning, family governance and next generation education and development. We work with families to design family offices, develop family enterprise strategies and reach key decisions at critical points in their lifecycle.
Working with the family behind the enterprise
The focus of family enterprise consulting is not just the enterprise. We take a family enterprise ’systems’ view, which involves taking into account the three dimensions of ’family’, ’ownership, and ’enterprise’, and how they interrelate.
This means our approach is always to consider the family, their ownership and their enterprising activities in parallel. As well as taking the time to understand a family’s enterprise, we also take the time to understand their particular culture, dynamic and objectives. Rather than treating families like a typical corporate or investor, we take into account the family drivers and influences that are often as important as commercial and financial considerations.
In fact, the family enterprise team always starts with the family behind the enterprise, working with them to articulate their goals before translating these into structural or organisational changes.
Like their businesses and investments, the families behind enterprises come in all shapes and sizes as well. Our clients range from first-to-second generation family businesses grappling with the transition from being ‘entrepreneur-led’ to ‘sibling managed’, to companies controlled by multi-generational networks of cousins.
Our services include family enterprise succession planning, family office set-up and creation, next generation leadership development, and family governance creation and review.
Family governance creation & review
Family governance structures enable families to organise themselves effectively and guide a family’s relationship with their family business or family office. In our experience, well-designed (and properly implemented) family business governance structures set out boundaries, create clarity, and result in greater harmony between family members, a more focused business, and easier transitions between generations.
We work with families large and small to design family governance structures that are right for them. This can involve working with families to set up family councils, boards of directors or other family business forums, developing employment and remuneration policies, and supporting families with defining the roles, responsibilities, rights and privileges of their various stakeholders. Once agreed, we then work with families to implement their decisions.
In addition, because we have helped so many families create successful governance structures, we are also often asked to review existing governance arrangements against best practice.
Whatever the assignment, we believe in documenting the agreements and decisions that a family makes. While not legally binding, a clear written family constitution / charter / set of protocols – based on an agreed vision and shared family values – prevents friction and doubt in decision-making by creating clarity of roles and responsibilities.
Our work on family governance typically involves:
- Analysing the needs of the family and enterprise
- Taking a multi-generational approach
- Designing a structure and set of policies that supports the family’s vision for the future
- Reviewing existing governance arrangements against best practice
- Facilitating constructive dialogue and frank discussion of key issues
- Translating the outputs of governance discussions into written form
Family enterprise succession planning
We recognise that succession planning represents one of the biggest challenges for family enterprises. Determining both the future ownership and management of a family enterprise can be very sensitive, and a multitude of factors need to be taken into account. However, with the appropriate planning, communication, and inter-generational teamwork, family enterprise succession planning actually presents a tremendous opportunity for both the family and their enterprise to become stronger.
Our team works in close collaboration with families and facilitates discussions between key family members (and/or non-family members, as the case may be) in order to create succession plans that will enable a smooth transition.
From a leadership and management succession perspective, our work ranges from the creation of assessment and development processes for the appointment of key management positions, to working with “retiring” family members on articulating how their role and influence will develop over time. On the subject of ownership succession, we help families determine how ownership should evolve as the family grows, and what structures can best facilitate this.
As with all our family enterprise advice, the succession planning process needs to be carefully tailored to the specific situation, as whilst the principles are similar, personalities and circumstances vary greatly.
Next generation & leadership development
A key part of our practice with family enterprises is working with next generation family members to assist them in meeting their goals and aspirations, as well as contributing to meeting the needs of the family and the enterprise.
Our work in this area is diverse and, as always, depends on the specifics of the case in question. Services range from providing one-to-one coaching to designing and delivering developmental workshops and meetings; we can even design bespoke development programmes to take a whole ‘cohort’ of a family’s next generation through training and development activities tailored to meet their specific needs and that of their family enterprise.
Helping to solve your most complex family business issues
Click on the diagram below to find out how we can support your family business.
An aligned family and business strategy often forms the foundations of long-term success of a family business. From alignment of the values by which the family operates, the vision of the family and the family enterprise, and the family legacy, to aligning talent management systems and reward structures to these values, visions and goals.
Values and vision
- Clarifying family and ownership values, vision and goals
- Determining shared family ownership objectives
- Articulating a shareholder mandate or steer for the Board
- Developing distribution policies
Remuneration and reward
- Aligning Board reward structures to family objectives
- Structuring equity reward effectively
- Creating talent management systems for family and non-family employees
- Developing policies for family employment and reward
Corporate social responsibility and philanthropy
- Developing philosophies and plans for corporate social responsibility
- Establishing and reviewing charitable trusts and foundations
Strategic planning is essential to profitable growth in any business and often includes a review of the competitive landscape to help make informed decisions around market opportunities and a review of the options for financing growth. However, family businesses must also incorporate family preferences and issues during the planning process such as alignment with the family vision, and planning for family events and generational changes.
- Aligning business strategy with family values, vision and goals
- Separating family/personal assets from the family business
- Planning for family events – births, marriage, divorce and death
- Reviewing competitive landscape and market opportunities
- Preparing for transactions – M&A, disposals, sale of the family business
- Sourcing equity and debt finance
- Accessing grants and incentives
- Facilitating shareholder exits
- Preparing for and support through generational changes
- Planning for family and board succession
Planning for exit
- Helping to plan for and execute an exit
It goes without saying that organisational structure is important for any growing business. For family businesses, this can mean structuring the business to meet both family and commercial objectives; carefully considering ownership shares, rights and responsibilities; designing and implementing appropriate management incentive structures; and continuously reviewing structure effectiveness – whether that be your Board structure, structuring to maximise tax reliefs, or realigning structure with a reorganisation or acquisition.
- Creating and reviewing ownership structures to facilitate succession– share classes, family trusts and Family Investment Companies
- Structuring the business to maximise tax reliefs, such as BPR
Management reward and incentive structure
- Designing and implementing appropriate management incentive structures
Business structure and governance
- Reviewing Board effectiveness
- Assistance with changes in structure – reorganisations and demergers
- Structuring and implementing acquisitions
- Reviewing family and corporate governance practices
- Managing tax and corporate administration
- Designing and setting up a Family Office
- Reviewing Family Office infrastructures
To be successful as both the company and the family grow, a family business must achieve strong business performance and ensure the family remains committed to and capable of carrying on as the owner. This means developing the next generation of family business leaders, and keeping your best talent engaged - both family and non-family members, managing risks such as issues with succession and those that can harm the family reputation, and helping to ensure shareholder expectations are met through rigorous reporting and benchmarking.
- Improving employee engagement
- Educating and developing the next generation of family business leaders for responsible ownership
Reporting and assurance
- Planning to ensure shareholder expectations are met through financial statements, disclosures, and non-financial reporting
- Reviewing accounting practices against regulations and policies for family/private businesses
- Assurance – regulation and compliance
- Prioritising, managing and measuring corporate social and environmental responsibility
- Managing trading/financial underperformance
- Helping to prevent and manage fraud in family businesses
- Protecting image and reputation in a family business
- Leading family meetings
- Coaching next generation members
While the operational demands of running a family business can be all-consuming, it is important to take the time to consider how instituting purposeful governance practices can help overcome the challenges many family-owned enterprises face. With the right frameworks in place, family governance systems and structures can help facilitate communication between family members, aid decision-making and problem-solving, and can be key in helping a family business to run effectively over time.
- Reviewing family governance systems and structures
- Developing ownership mandates
- Drafting family constitutions and charters
- Establishing decision-making frameworks
- Managing family dynamics
- Supporting stakeholder interactions