Professionalizing the Family Business for Growth & Generational Wealth

• This program aims to help families in business as they get committed to firmly establish their Governance Structures and System. The Governance System is the locus where all collegial leadership is exercised and applied. Setting up a proper, regular and consistent Governance System is critical for a family business who sees long-term growth and success across generations. However, it has to be done in an effective and more professional way, as much as possible and as soon as possible.

• All strategic and tactical decisions of the family business emanate from these Governance Structures: The Family Council and the Board of Directors fora. These are decision-making bodies that lead the whole family enterprise. Thus, it is very beneficial and advantageous that family businesses are given initial guidance and facilitation in this fundamental step of professionalization.

• This program kicks off with the Family Team Building followed by the Family Constitution Review.

• After the family has manifested its unity through its family constitution, the greatest challenge is reaping the gains from this unity and sustaining it. BEG builds on where the Family Enterprise Planning (FEP) left off.

• The family has already participated in the change process when they drafted and signed their family constitution. The family has to be guided to put the mechanisms of the change process in place and one approach is to build a governance structure that shifts from a founder-centered decision-making to a more collegial one.

• BEG introduces a consultant into the family and business systems who functions as a facilitator, a coach, a technical adviser or a change catalyst to ensure such governance structures are in place and the change process sustained.

BEG provides the following benefits:

1. Provide objective and unbiased perspective of the family dynamics.

• BEG provides a lens, a perspective of an outsider looking in. It creates a different window in which to approach issues or challenges for decision- making. It provides a different point-of-view of the family interaction and to harness this point-of-view as a reference and benchmark for change.

2. Provide technical expertise and advice in terms of process and content to ensure that the family constitution is truly a genuine framework for decision-making.

• BEG ensures the family follows the most effective process for decision- making. This focus on process will help the family create mechanisms or systems to support the family for example the family fund. Since the consultant assigned is chosen for a certain level of expertise in the industry, there is more quality in the advice in terms of content. This guided approach in BEG provide mentoring mechanism for the family council members and prepare family members for future leadership.

3. Ensure that the family develop the self-imposed discipline of governance into a habit, a habit into a system, and a system into a culture of good governance in both the family and the business systems.

• The weakest link in any system is the human component. The system of good governance therefore can only be sustained if the governance system instills a cadence of accountability. BEG ensures that this cadence becomes a habit, this habit becomes part of the family system eventually evolving into a culture of good governance that spills over the business system. Only then can the human component of the family system sustain excellent execution.

In this program, PFBC commits to:

1. One Year Monthly Family Council Meeting Facilitation and Guidance (with option for pre-meeting consultation); and One Year Monthly Board of Directors Facilitation and Guidance (with option for pre-meeting consultation)

1. Follow-up on tasks resulting from FEP
2. Advise on agenda priorities and preparation
3. Co-moderate meeting in partnership with the Presider
4. Provide relevant information and insight on the concerns discussed
5. Mediate and manage conflicts, if it arises during a meeting
6. Provide an objective and neutral and truthful standard perspective in meetings/discussion

One Year Monthly Board of Directors Facilitation and Guidance (with option for pre-meeting consultation)

• Family Constitutions will stay useful only if it is relevant. When family needs and situation change, it is expedient that the framework for guiding family decision- making respond to these changes.

• In this process, the family articulates there changing needs and reflects the response to these needs by amending the family constitution. We work with the family to frame the clauses and provisions of the family constitution to reflect what needs they are articulating in an organized and cohesive text.

• Some clauses or provisions may be amended or new provisions added driven by the family’s existing context, and some changes to accommodate changing family structures (for example, induction of new members into the family fold).

• We then review the document for form and substance ensuring that it is always synchronize with current legislation.

• The Family Constitution Review is a whole day activity.

• Family team building are exercises designed and managed to help the family build cohesion and teach them to work through their common issues.

• These are achieved by encouraging direct and frequent communication, establishing ground rules for communicating, appreciating the uniqueness of individual family members, mediating or resolving conflicts, providing family members with tools to manage feedback, instilling or reinforcing collaborative working relationships, and acknowledging successes and contributions of family members.

• The Lead Facilitator selects and tailors the series of activities for the family to achieve a desired outcome (for example: improve communication, teach collaboration, learn proper feedback, etc.).

• The Lead Facilitator provides instructions and house rules for the activity. During each of the activity, the Lead Facilitator explains what the activity is about and checks the level of interaction after which the family is processed to allow them to acknowledge their learning experience.

• For this program, the activities is a preparation for the family to collaborate in the review of their family constitution.

• Family Team Building is a one whole day activity to prepare the family for the family constitution review.