Although spouses may not necessarily be shareholders in the family business, they can play a critical role in its stability and success. You can’t ignore the fact that they are the primary influencers of their partners who either work in the family business or will become future shareholders.
For this reason, it’s important to have pre- agreed protocols in place that define the role spouses should play. One suggestion is to include them in family meetings to help foster an environment of inclusivity, preserve family unity and maintain harmonious family dynamics.
There’s no doubt that spouses would naturally have an inherent interest in the success of their partners, as well as the success of their own families whose livelihoods may be inextricably tied to the success of the business.
For instance, spouses might want to know: What are the roles and responsibilities of their partner? Are they being compensated fairly? Why do they often have to work longer hours than other family members? Are their contributions appreciated? What is their scope for advancement in the business? If their spouse is currently not involved in the business but would become a future shareholder through inheritance, what would the expectations and responsibilities be?
In addition, they may want clarity about matters that could affect their children. What would the requirements be for them to work in the business in the future? Will the family business help with the cost of their education?
The answers to these questions can be directly or indirectly obtained through regular formal family meetings which can help to foster open communication.
This is not to say that spouses will always get the answers they want to hear. As with any family, there are bound to be disagreements and differences of opinions among family members. But they can often be settled through consensus and collaboration at family meetings. At the very least, spouses will have the opportunity to air what’s on their minds and get clarity on issues that they care about.
Unity outside the boardroom
It can also prove advantageous to include spouses when family meetings are held in an informal setting. For instance, you may decide on combining a business meeting with a family retreat or vacation. Spouses can assist with co- ordinating the fun activities at such events.
Having them help put together events that bring the family together such as birthday and graduation celebrations can also help them feel included.
Another approach is to include spouses in their philanthropic or charitable initiatives on behalf of the business and become its ambassadors in the community.
These inclusive activities can make them feel like a valued part of the team, supporting both the partnership among siblings and the cohesiveness of the family unit.
The Pros and Cons of Engaging Spouses?
On the negative side, their presence may raise concerns about whether they can make a contribution if they have no prior business experience. Or, concerns may arise where they seek to defend the actions of their partners or question their compensation which could create friction among other family members.
In addition, fear that marriages may end up in divorce, putting business secrets at risk or that a divorcing spouse may try to gain access to assets of the business if the business hasn’t been adequately protected by prenuptial and shareholder agreements.
On the other hand, excluding spouses from family meetings can lead to feelings of isolation and anger which can disrupt family harmony and cohesion.
Including spouses gives them the opportunity to voice their opinions openly and learn about the family business at high level, without affecting ownership decision-making.
Spouses without a business background may be hesitant to participate in family meetings because they may feel poorly equipped. Encouraging their participation can reinforce inclusiveness and enhance the family dynamics.
Spouses new to the family can sometimes experience culture shock, but if you‘re open, clear, and transparent with them, their contributions might prove to be of value.
At the end of the day, the rewards of engaging spouses in family meetings are greater than the risks.
It‘s essential for you to make sure that spouses feel secure and welcome at meetings. They deserve to learn about the family history, values and codes of conduct first hand. You don’t want them to depend solely on their partners for information as this information can be filtered.
You should take conscious steps to educate them about the business and introduce them to the family culture. This will allow them to get a greater appreciation of the business. Their partners should openly support them in building relationships with their siblings as well as their spouses.
Encouraging their participation in meetings and learning and leveraging their strengths is also important.
Ultimately, engaging the spouses can help preserve family unity and including them in family meetings can help the family business function better and build stronger bonds among family members.