7 Reasons to Invest in a Board, Shareholder & Family Platform in 2023

Many of you are familiar with the statement “Once you have seen one family business, you have seen one family business”. Even if every business family is unique, we believe that most of them face similar challenges.

• The family gets more complex
• The family members spread out over different cities, sometimes even countries
• The next generation grows up with different educational backgrounds, skills and interests
• Fewer family members have an active role in the original business that created the family wealth
• The ownership stakes and the leadership composition start to vary and get more complex
• Families need to share and store sensitive documents and communicate digitally with their members, board, and shareholder groups. 

The above illustrates that the more you advance in the generations, the more difficult it becomes to manage the family and the business. It is estimated that only 10% of business families manage to keep the family business and/or the family wealth together for more than 3 generations, which highlights that many families underinvest in the management of their family, versus in the management of their business( es) or investments.

Research has shown that:

• In 60% of the cases this is due to lack of communication in the family
• In 25% of the cases this is due to lack of education and preparation of the next generation

WHY A BOARD, SHAREHOLDER, AND FAMILY PLATFORM?

Family business platforms are typically used to enhance one or multiple of the following 7 activities:

1. BOARD, SHAREHOLDER AND FAMILY MEMBER MANAGEMENT

• Where do you store your family, board, and shareholder contact details?
• Do you have up-to-date email addresses?
• Can you view their details in one secure place?

The first stage in developing your family platform is to source all family and shareholder contact information, create a centralized database, ensure all contact details are up to date, build a personal profile on each one, get-up to-date photos, make sure you have birthdays, education history, work experience, personal interests. Once done, this gives you a great starting point to manage your communications and shareholder/family/board community.

Naturally, the more information you have, the more updated it is and the easier it is to access, hence the more effective your communications will be.

2. COMMUNICATION

Given that communication is key for long-term family and family business success, digital platforms are a great way to facilitate:

• Communication between family business staff, and family members. When set up correctly, these platforms offer additional security to other communication channels, such as email. They also allow you to create more transparency in your communications, to archive and organize your documents in a more structured way
• Board and shareholder communication from the family business(es) to the family
• Family communication

3. DOCUMENT MANAGEMENT AND ARCHIVING

In today’s complex and global world, the number of documents business families, their board, and shareholder groups need to manage increases every day.

Digital platforms can help you to:

• Make documents available to the right people at the right time, through flexible
• permission-based systems
• Share sensitive documents more securely
• Organise and archive documents in shared folders, so that only authorized people have access to the latest version of important files
• Systemize document retention and record-keeping for the long term, so that you can always go back in history to know what was decided, and when, for example

4. BOARD, SHAREHOLDER AND FAMILY GOVERNANCE

As families grow from one generation to another, many families set up family councils, family boards, investment committees, shareholder councils, communications committees, working groups, etc.

Centralized digital platforms can enable each of these groups to:

• Schedule and arrange meetings
• Share minutes of meetings
• Collaborate online on working documents, to-dos, etc.
• Archive the key decisions that they take
• Centralize all communications in a platform, but maintain separate groups and permissions.

5. FAMILY AND BUSINESS EDUCATION

In a world full of opportunities, it is increasingly important that you successfully educate

your shareholders, board, and family members about the value of your business and the opportunities it presents. Bringing everyone together in one room can often be challenging, e.g., if a number of next generation members study abroad, or if the family is geographically dispersed. Families, boards and shareholder groups can reinforce and complement their in-person education initiatives by setting up a platform and:

• Posting regular training and educational videos that people can watch remotely
• Organizing virtual training sessions through webinar technologies and posting recordings on their platform
• Building an online education library with key resources and materials that family members can access at any time to develop their knowledge, and skills
• Educate the family, board members and shareholders about their business by creating engaging media and making it available to all via their centralized platform

6. FAMILY LEGACY AND HERITAGE

Many families struggle to keep family members and shareholders interested in the business, and maintain family values over generations while respecting family diversity.

Digital platforms can be used to:

• Share and document family business history and values
• Maintain a live and interactive family tree so that family members can easily connect to the family and even board members and shareholders understand who is who
• Create interaction between board, shareholder, and family members that may not necessarily know one another very well
• Digitize your legacy, bring it to life, share it with your family, board members, and shareholders, encourage them to learn their history and start supplying their stories

7. REPORT, MANAGE AND UNDERSTAND

Every business family often appoints one or more individuals who are responsible for maintaining a member database, organizing meetings, get family, board and shareholder feedback and input into documents, decisions, to attend meetings, to confirm agreements. This can become increasingly time-consuming and involves using multiple solutions.

Digital platforms can automate and simplify these tasks by:

• Automating event scheduling and organization with online invitations and reply forms
• Centralizing the family member, board and shareholder database and enabling everyone to update their data immediately

In addition to the above, platforms can also offer detailed metrics on family members’ activity and engagement, which 1s an invaluable source of feedback for the business family, their board, and shareholder group.

These platforms can also help you track and report by:

• Showing who has read documents
• Who has replied to meeting invitations
• Who has viewed or commented
• Who has logged in and how often

They enable you to gain a clear understanding of what communications work, what interests your board members, shareholders, and family and how to maintain cooperation and engagement on all levels.

WHEN DOES IT MAKE SENSE?

The need for a board, shareholder, and family platform will depend from one family business to another, but will, in most cases, increase along the following drivers:

• You have sensitive documents to share and store securely
• The increasing number of family members/ shareholders/ board members
• The age of the next generation
• The geographical spread of the family and business leaders
• The day-to-day family involvement in the core business activities
• The number of family business staff or advisors
• The number of entities
• The number of governance bodies or work groups

HOW EASY IS IT TO SET UP?

With the standardization of technology, the setup process for a board, shareholder and family platform has become shorter and simpler. Once a decision has been taken by the family to move forward you can typically be up and running in 1 to 3 months if you opt for an outsourced solution. Building a platform in-house can be a lot longer depending on the scope of the project A new centralized and permission based platform is often a great initiative to be introduced during a family, board or shareholder meeting. Every user can come with their laptop, phone or tablet and receive live training.