Family business page
Unless there are extenuating circumstances, we typically recommend the rising gen to work outside the business for at least a year before joining the family business. This will help the rising gen build their own self confidence and get crucial experience outside the family business that they can bring back into the family to further grow the company. This also helps eliminate any ‘nepotism’ conversations amongst the non-family employees who might be concerned that the rising gen only got the job because they’re family if they joined without any prior work experience.
This is a classic challenge in family business governance and communication. When a non-operating family shareholder expresses dissatisfaction with leadership decisions, it’s important to strike a balance between respecting their voice as an owner and maintaining the authority of the leadership team to run the business. Make sure their concern is noted, and they know the pathway to provide constructive feedback. If you can create a forum for shareholder feedback, that will also help the family member feel engaged and included.
This situation calls for both clarity and care—because you’re dealing with accountability, family dynamics, and business impact all at once. In this scenario, it’s important to separate the family and the business in the decision. Although the family ties are still intact, this decision has hurt the business, and the family member can’t be let off the hook. From there, make sure to assess the decision objectively and in this case sit down with the family member to discuss the performance outcomes from the decision. Finally, recommend corrective actions or consequences that are needed.
