Councils can also set up systems that help ensure future management continuity. “Embroiled as they are in business operations, the company’s current management will not be thinking about grooming future generations for board or management positions,” said Christopher J. Eckrich, a senior advisor at Te Family Business Consulting Group. “But this topic can be a critical concern for a family council, which might well decide to set up educational systems to prepare future leaders.”
Management Conflict
Sometimes the border between family and business is a bit fuzzy. Te result can be a mismatch of goals. Take the area of risk tolerance. “Managers with incentives to grow the business rapidly may feel the best way to do so is to engage in acquisitions,” said Eckrich. “However, buying other businesses often requires borrowing money, and that can be resisted by family members who want to diminish risk by maintaining a low debt-to-equity ratio.” In such cases, said Eckrich, it’s not unusual for a family council to accommodate business goals with a compromise. “Rather than green-light a huge acquisition, they may opt to take on a series of smaller ones.”
Company initiatives that make sense strategically can also butt up against family values. Eckrich gives a commonly encountered example. “Maybe a board decides to close the company headquarters located in a small town where a business grew up and move operations to a larger city. But the act of closing the headquarters grandma and grandpa created 60 years ago can end up exploding the family.” Wise boards run such sensitive initiatives by the family council for discussion and feedback, said Eckrich. A proactive approach can reduce the chances for conflict.
Resolving such issues can have a beneficial effect on company profits. “In economic terms, the family council can strengthen the emotional connection between the family members and the business operation,” said Dartt. “Te result is that the organization benefits from patient capital owners who are willing to leave their money in the business for long-term return.”
Tis kind of financial loyalty can be especially important for those enterprises with family members residing in distant locations. Dartt adds, “A council can ensure that widely separated family members understand they have a voice in decision-making, and feel a sense of pride in the enterprise.”
A council can also serve as a useful venue for family members to reach accommodations on conflicting personal goals. “We often see situations in which some family members feel emotionally connected to the business and want it to see it continue,
TPI Turf News September/October 2025 63
while others are more interested in having their money go elsewhere,” said Dartt. “Maybe they want to make an addition on their house, or put their kids through college with no debt, or buy a vacation home. Tese wildly different priorities can tear a family apart.” In such cases, family councils can obviate costly flare-ups by providing for the cash-out of some ownership shares while ensuring that the cash outlay does not harm the company’s future growth.
Keep It Real
Launching a successful family council requires a bit of thoughtful planning—including a decision about its composition. “Someone has to decide what categories of people will serve on the council,” said Harms. Very often, membership will be open to any family member, regardless of share ownership. Other councils might be restricted to categories such as first-generation owners, siblings, or spouses. “Te emphasis should be on the first word: It’s a family council, not a business council or a board of directors.”
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