Prof Venter spoke on family governance and how financial planners can use family governance tools to plan for ownership and management succession. Prof Venter was joined by panel members Gerrit Schmidt, Ajanta Mayku, Mzwandile Mtshali and Navin Ramparsad. Prof Venter highlighted that family governance is an ongoing and complex process and that its main purpose is to separate family and business decision-making. 
Prof Venter underscored the fact that consulting to families requires a multi-disciplinary approach and that succession planning and governance processes/structures goes hand in hand. Governance tools for the different sub-systems of the family business facilitate important issues about ownership and leadership succession. Successful family owners manage two components of governance. The first is corporate governance, which highlights the strategic direction of the business, operations and strategy and secondly family governance, which refers to providing a framework of rules that define family members’ roles and responsibility and how the family interacts with their business. An effective family governance plan should: establish a culture of open communication, demonstrate competence in assigning responsibilities, establishing an effective generational succession plan for continuity of the family business, help families to speak with one voice, professionalising the businesses, creating family conflict processes, and creating a shared vision amongst all branches of the family.
The three most important components or vehicles of family governance are: family meetings, which benefit both inactive and active family members; family council meetings for those families that benefit from a representative group of their members doing planning; and the family constitution, which represents the family’s policies and guiding vision and values that regulate members’ relationship with the business. The Nelson Mandela FBU has been giving training to companies like PWC, ABSA, Old Mutual and KPGM for more than 10 years on how to consult to family businesses and how to design family governance. The training is especially aimed at CAs, lawyers and financial planners who are often trained in the "hard" issues around business families, while our training focus on the "softer" issues of succession, estate and governance planning.
Important lessons shared by Prof Venter with the audience, based on her experience researching and consulting to family businesses over more than 17 years included:
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The importance of understanding socioemotional wealth (SEW) in family businesses. The concept of SEW is used to explain the differences in behaviours of family and nonfamily businesses. SEW embraces the benefits family-owners derive from the noneconomic aspects of the business. In other words, business families place as much emphasis, if not more, on achieving non-economic goals as they place on achieving economic goals.
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Values of the owning family influence the ownership, management, family and governance sub-systems of the family businesses and should be the foundation on which the whole family governance system is build.
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Consultants should remember that there is a lot of underlying emotions in family businesses that influence their decision-making processes. The family consists of individuals with their own personalities, expectations, and talents. It is therefore important that every family member knows where they fit into the ownership, management, family and even governance sub-systems and what their responsibility and decision-making scope in each of these systems are.
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There is no recipe or blueprint on how to approach family governance. It depends on the composition of the family, business and ownership structures of the family business.
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There must be a commitment of all family members to the process – both economically and socially.
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The process is more important than the outcomes and strengthen communication between all family members and should create a culture of transparency, fairness and open communication.
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Family governance provides a learning environment for families and facilitate talking about “difficult stuff/issues” in a safe environment.
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Consulting to family businesses requires a multi-disciplinary approach and consultants should take care to not consult outside of their level of expertise and training.
