OVERVIEW A third-generation daughter engaged Blackwood to help increase alignment between she and her non-active sibling shareholders regarding a common vision. The family enterprise had undergone significant change in the years leading up to working with Blackwood; operating companies had been sold to create a new family investment company with a specific focus.
The daughter active in the business had a compelling vision for the future of their family investment company, but this vision was not supported by siblings. Each branch had a different view regarding what purpose the family’s wealth should serve, and how/when members of the rising generation should begin having access to it. Competing goals led to conflict and confusion, resulting in an inability to implement any new planning strategies for the future of the family’s shared wealth in their investment company.
Many of the non-active shareholders also felt overwhelmed and ill-equipped whenever the family met with teams of advisors. Several came to the discussions without a formal business background, unsure of what questions they should be asking, or what the implications would be for recommendations being made to them. Finally, many of the non-active shareholders felt they didn’t have a voice in the discussions.
The lasting impact of a common vision and a sound communication process.
When Blackwood was first engaged, a considerable amount of discussion was facilitated to reach a point of alignment regarding the purpose of the family’s shared wealth including clarity around who would control it, and how it would be managed.
The family council (with one member representing each branch of the family) now meets on a quarterly basis to engage in intentional discussion regarding the future of the family investment company and ensure all branches remain abreast of issues. The Blackwood process has positively transformed the operation of the investment company; shepherding a more rigorous approach to analyzing opportunities, communicating about them, and making informed decisions that all branches of the family support. Achieving this common vision for the family and clarity around how to communicate in the family business has had a halo effect in how the family communicates and engages with one another at family gatherings and community events.
Since completing the initial engagement, Blackwood’s work has expanded to encompass meetings that include spouses and semi-annual family conferences that involve members from all 3 generations at the table. Blackwood continues to manage the family’s education plan and facilitates estate planning discussions within each branch while maintaining the confidentiality of the respective branches throughout this process.
Discovery Interviews with the G1 patriarch and each of the G2 siblings revealed numerous ‘ah ha’ moments, and points where past misunderstandings had occurred that lead to present-day complications.
Established guiding principles and a family governance/family communication plan, which ensured misunderstandings and conflicts did not reoccur.
A family education plan was developed to prepare all generations of the family to be responsible stewards of family wealth. Members of the second generation learned about corporations, family trusts, voting vs non-voting shares, and other concepts that are important to understand before new legal structures are enacted. Running in parallel to this, members of the third generation learned about the basics of budgeting, assets vs. liabilities, marginal tax rates, registered and non-registered investments, and other topics that serve as a strong foundation for financial literacy.
Recognized a need for corporate re-organization. Working collaboratively with the family and their incumbent team of legal, accounting and tax advisors, Blackwood oversaw the development and implementation of a completely new ownership structure including Unanimous Shareholder Agreements, trust indentures and wills. The corporate reorganization was all completed in under 11 months.
Confidential check-ins were conducted with individual members of the family after technical planning discussions to ensure the information presented was understood and retained, and to provide a ‘safe space’ for questions. These confidential check-ins helped to keep the family aligned and the momentum strong between family meetings.