Family Council sets rules for making decisions together in the family (Part 1)

“Voting is a quick way to reach a conclusion. But it has a weak point that may cause

Division exists because there are losers and winners.”

“Whose voice is the biggest in the family?”

“How do you decide to be fair?”

Living together as a family and sharing finances, often referred to as a "family business," makes "joint decision-making" a crucial issue. Family members need to discuss anything before undertaking a project. Could you just do it without asking anyone? The answer is "yes," if you have enough authority!

The people who can make decisions without having to ask anyone are usually the father and mother. If the house is the biggest, the parents are the biggest. Or maybe it's the children. If that house is the biggest child, they are the "powerful people" in the family. But wait, where does that "power" come from? That power may come from being a parent. Or if they are siblings Power may come from being the custodian of the family's money. Power may come from being in charge of the family's affairs. Or sometimes power may come from taking “Parental love” or “peace at home” are hostages. (That is, if you don't get what you asked for, it's definitely a problem!!)

But what if one day your parents or a respected elder in the family are no longer with you, and they decide they can't tolerate it anymore? Who can answer that: between siblings, or aunt/nephew/niece/nephew? Today, we'll discuss "joint decision-making within the family" from various perspectives, to prepare for the day when differing opinions threaten to undermine the family business.

Whose voice is the biggest?

“Authority” is the person who sets the rules for making decisions.

So who is the “authority” in the family business? In general, the person with authority is the father and mother. Because he is the creator of the whole family. and business comes up But sometimes parents may give in to what their children want, which makes it seem like the child is "in authority." But in reality, A child's power comes from the "submission" of their parents. Therefore, the power that the child has is not real power. “Real power” can be said to come from two important sources: laws granting power, such as ownership of land; (Everyone whose name is the owner...is equally big), the power to sign checks, the power of directors (people who can sign...big), etc. And another important source of power is "barami." What is charisma?

"People with merit" in the family

There is one person who is very important to the functioning of both the family and their business. This person sets the family rules, makes important decisions, and resolves conflicts when family members quarrel. I call this person the "authority leader." In a family business, this authority leader is often the father or mother who leads both the family and the business.

Therefore, "family business leader" and "charismatic person" are the same person, but in a large family, “Family business leader” and “charismatic person” may be the same person or different people. If you want to know who is the "powerful person" in your family business. Please try to notice the following important characteristics.

• People who, when they speak, members will listen.
• A person who plays (or used to play) an important role in the family business.
• The person who is the center of family relationships.

“People with charisma” in the family usually have at least 2 characteristics from the above characteristics. We cannot appoint anyone to be a dignitary in the family. And parents are unable to pass on "barami" to their children. "Barami" is considered a characteristic that is developed within each member. It is a combination of (1) past success that has led to acceptance, (2) accumulated good deeds that have earned the trust of the members to do everything for the benefit of the family, or (3) being approachable. Make family members run to you when there is a problem.

“People with charisma” bring peace to the family. But it creates a weakness for the family.

When there's a "powerful figure" in the family, they become like a comfort zone, much like children who are pampered by their parents and may never have to solve problems or bear any real responsibilities. This powerful figure is everything to the household, solving problems, mending relationships, creating rules for peaceful coexistence, etc. This "powerful figure" is a "living set of rules"; they are the family's regulations, their ideas are the policy. This is why the family is at risk when that person is no longer around, because we've become too attached to the comfort of their presence. Therefore, the stronger the powerful figure, the greater the risk to the family.

Change from “leader” to “committee” making decisions

One way to reduce the risk of becoming attached to a charismatic person is to create a joint decision-making system in the family Or what we call the "Committee" system. How good is the committee system? The advantages of the committee system are: (1) Decision making is more deliberate. Help each other look at different angles. (2) Lighten the burden of making decisions. and share both good and bad results, and (3) create a feeling of shared ownership of decisions (Decision Ownership).

But there are also disadvantages of the committee system, such as (1) it takes more time because decisions must be made together; Meeting time is wasted; (2) damage may occur if an agreement cannot be reached in time; or (3) a resolution may not be reached at all in the case of equal votes, etc.

However, the “committee” system will become necessary. When the day came that no one with a stake in the family was bigger than anyone else. (No one has to listen to anyone) and the family no longer has anyone who can be called a "charismatic person" who can help make decisions. A committee system is often used to solve problems in such situations, and a "family council" is a form of committee system.

What is a “family council”?

Family Council is a forum for members to communicate. Set policy-rules and resolve conflicts between families The important policies or rules include business succession policy. Policy on compensation for members Family stock, welfare and investment policy or even policies to maintain good relationships and reputation of the family

The key to establishing a Family Council is that the Family Council itself must be a good representative (Good Representation) of the various groups in the family to reflect their true needs. Preserve the rights and interests of members of various groups in the family, such as family representatives. Representative of the elderly - the new generation Representatives of bloodline members - legal members (spouse, adopted child), etc.

In general, families have a "Family Council" as the main committee to discuss and decide on various internal family matters, while there is a "Business Board" (Business Board) as the main committee to discuss and decide on internal family matters. Various matters Regarding family affairs, as Prof. Dr. Suthiphan Chirathivat once said: “If we talk about business, we have to look at Central. And if you want to talk about Chirathivat, look at the Family Council.”

Another interesting issue is the "outsiders" who are on various committees. In general, in family councils there are usually no "outsiders" involved, whereas in business committees, "outsiders" are often involved in decision-making, with "outsiders" playing an increasingly important role. As the business grows, the proportion of outsiders on the board of directors varies from family to family, ranging from 0% in small family businesses. (that is, there are no outsiders at all) to more than 50% in large family businesses can be seen.

Is a “family council” necessary for young families?

A “family council” does not need to be crowded. There is no need for many formalities. The heart lies in talking and making decisions together. One family I interviewed Father made it a rule that all children must come and eat porridge with their parents every morning. During the meal together, they would talk about various matters including household matters, business matters, property management matters, etc. and if they were not finished talking, they would sit and continue talking in the living room. It's like this every day. This kind of behavior may be called A type of "family council", therefore, for small families with a few members Three basic recommendations are:

• Arrange regular meetings continuously
• Talk about business, family, property management. Including other matters of concern and doubt.
• Tailored to fit your family – there is no fixed format. (There is no limit to talking at home, at work, in the morning or in the evening, etc.)

Importantly, family members must be able to discuss anything in family council meetings. "Meet often and talk about what needs to be discussed" is a basic guideline for all families. Mary Duke, an expert in family business, offered an interesting perspective: "Family meetings are where members from different generations come together to discuss the 'intangible' aspects of wealth, such as expectations, concerns, and shared goals... In addition, family meetings are a place where members can reflect on past problems in order to build a new future together."

Resources:

• Barbara Hauser, “What Are the Best Ways for a Family to Make Decisions Together?”, Wealth of Wisdom: The Top 50 Questions Wealthy Families Ask, John Wiley & Sons Ltd. UK, 2018
• Mary Duke, “Should You Have a Family Meeting?”, Wealth of Wisdom: The Top 50 Questions Wealthy Families Ask, John Wiley & Sons Ltd. UK, 2018
• Sandra S. Hodge, “Managing Conflict at the University and in Society: A Process for Sustainable Decision-Making”, 2013
• Battleship, “Family Aesthetic Conversation Ten Days to Change Your Life 2”, Suan Ngern Mee Ma Publishing House, 2553
• Nawaphon Wiriyakulkit, “Family Constitution Course Lecture”, September 2565
• Nawaphon Wiriyakulkit, “Family Constitution How to write successfully” Finance and Banking Publishing House 2557
• Nawaphon Wiriyakulkit, “ “4i” four steps to joint decision-making in family business: reducing conflict with a 4-step participatory decision-making process”, Money and Banking Journal
• Nawaphon Wiriyakulkit, “Good decisions must be fair and caring: Learn the decision-making process that is good for business - strengthens family relationships”, Finance and Banking Journal
• Nawaphon Wiriyakulkit, “ “Charisma” in family business?: The role of charismatic and family constitutions during leadership transitions ”, Finance and Banking Journal