leveraging family meetings 3 carr - family meetings presentation.pdfpwc | leveraging family meetings...

Leveraging familymeetings

May 18, 2017

www.pwc.com

PwC | Leveraging family meetings

About the speaker

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Charlie J. Carr, CFP®

Managing DirectorFamily Enterprise Advisory [email protected] office

Charlie inspires families to achieve their legacy for the next 100 years.

He oversees PwC’s family enterprise advisory offerings, which includes solutions for families, their family businessand family office. He leads projects in family governance, succession planning, setting up family offices, andperforming diagnostic reviews of existing family offices to ensure they most effectively support the family and itsdesired legacy.

Charlie has worked in professional services for over 25 years, as a consultant, banker and wealth advisor. For thelast 13 years, he has worked exclusively with very wealthy families, their businesses and their family offices.

He holds a Bachelor of Business Administration in Accounting and Management from Baylor University and is aCERTIFIED FINANCIAL PLANNERTM. Charlie coached youth baseball for 15 years and has developed and taughta personal finance class for high school students.

Agenda

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• Family governance

• Purpose of family meetings

• Sample agendas

• Topics and speakers

• Best and worst topics/speakers



Family governance

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What is family governance?

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The process by which a family is directed, controlled, andheld accountable.

It includes the governing bodies (boards, variouscommittees), as well as the process of defining andmaintaining family values and culture.

Governance incorporates authority, accountability,leadership, and stewardship, and is key to ensuringadherence to the family’s value system.


Governance structure of a complexfamily enterprise

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Family Governance Business Governance

Family AssemblyShareholders’

Assembly

Council of owners(Trust)

Board of Directors

CEO

Management

Family Office

Family Foundation

Education Committee

Family Retreat

Investment Committee

Redemption Fund

Venture Capital Fund

Governance

Family Council


Growing andsuccessfulbusiness

Familytrusts

Shareholderservicesdivision

Virtual orhybrid

family office

Fullfamilyoffice

Life cycle – Evolution from embedded tostandalone family office

Successful family businesses follow a common path as they begin providing personalservices within the family business before eventually forming a separate family office.

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Family business (embedded FO) Family office

Business createswealth that willlast generations

Establish truststo pass wealth,minimize taxes.Define succession

Business staff(typically in CFO’soffice) dedicatedto handlingfamily finances

Create separateentity; outsourcemany serviceseither to familybusiness or outsidevendors

Growing familyand wealthjustifies hiringmore staff andbringing servicesin-house

• Source ofwealth andidentity

• Employment

• Tax planning

• Protect wealth

• Ownershipsuccession

• Provide wealthmanagementfor family

• Tax efficiency

• Family privacy

• Managefamily risks

• Control overresources

• Succession

• Estate taxes

• Trustees

• Education

• Financialservices

• Family identityseparate frombusiness identity

• Family privacy

• Different HRpolicies for SSDstaff

• Family comfort withusing businessstaff

• Distraction forbusiness staff

• Tax efficiency

• Reliance onoutside vendors

• Staffing andsuccession

• Increasedcosts

Benefits

Challenges

Description

Phase


Key elements of good governance

Business agreements

• Articles of incorporation

• Bylaws

• Company mission statement

• Strategic plan

• Board charter or missionstatement

• Buy-sell agreements

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Family agreements

• Family vision statement

• Code of conduct

• Family charter or constitution

• Strategic plan


Family enterprise advisory servicesCommon challenges of a wealthy family (small sample)

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Business challenges Family challenges

Business continuity

• Board development and governance

• Voting/non-voting structures

• Non-family executives/board members

• Leadership succession (non-family and/or family) –both board and executives

• Strategic planning

• Attracting non-family talent

• Ownership by non-family executives?

• Distributions, liquidity, exit plans

• Relative importance: business vs. family unity?

Policy setting

• Family employment policies (education, experience,roles, in-laws, etc.)

• Role of owners working in the business

• Compensation vs. distribution

• Preparing the next generation

Estate complexity

• Number of trusts and entities

• Shared ownership: partnership and fund accounting

• Tax filings

• Roles of trustees and beneficiaries

Investment complexity

• Variety of custodians/advisors

• Illiquid holdings: HF, PE, RE

• Reporting, asset allocation

Legacy

• Education

• Family reputation

• Family communication

• Personal security

• Risks: financial, privacy, reputation, legal

• Renew the wealth engine as the family grows


Purpose of family meetings

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What is a family meeting?

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Business meetings

Monthly family lunches

Quarterly family gatherings

Annual retreats


Purpose of family meetings

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Build familyunity andcohesion

Establish/buildfamily legacy

Govern

Educate

Communicate

Have fun


About family meetings

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Participation

Frequency

Locations

Length

Funding

Facilitation


Sample agenda

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Sample agenda – Weekend retreat

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Thursday

Arrive at resort

7pm Family dinner ABC restaurant

Friday

8am Breakfast Café room

9am Opening remarks

Update from eachfamily branch

Patriarch

10am Icebreaker activity #1

10:30am Business update President

Noon Lunch Café room

1pm Cybersecurityeducation

Outside speaker

1:30pm Review family vision Family councilrepresentative

1:50pm Family history Family elder

2pm Estate planning Outside speaker

3pm Family fun activity

5pm Free time

6pm Reception XYZ restaurant

7pm Dinner XYZ restaurant

Saturday


9am Update from family council Council chair

10am Icebreaker activity #2

10:30am Training for trustees andbeneficiaries

Outside speaker

11am Economic/market updateand investment review

Investment advisor

Noon Lunch Café room

1pm Icebreaker activity #3

1:30pm Foundation strategydiscussion

Philanthropiccommittee chair

2pm Communication styles Outside speaker

3pm Family fun activity

5:30pm Reception MNO restaurant

6:30pm Dinner MNO restaurant

8pm Family casino night

Sunday


9am Personal security FO president

10am Strategic planning Council chair

11am Closing remarks Patriarch

11:30am Depart

Familymeetingcomponents:

Welcome

Activities/icebreakers

Culture/history

Communicate

Governance

Education

Fun


Sample agenda – One-day meeting

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One day meeting

8:30am Opening Patriarch

9am Ice-breaker Facilitator

9:30am Business update Business president

11am Investment update Investment advisor

Noon Lunch

1pm Estateplanning discussion

Outside advisor

2pm Technology andcybersecurity training

2:30pm Financial education Based on topic

3:30pm Charter/strategic planning

Facilitator

5pm Q&A,ongoing discussions

Facilitator

6pm Family dinner


Welcome


Culture/history

Communicate

Governance

Education

Fun

PwC | Leveraging family meetings 17

Thursday

Arrive at resort

7pm Family dinner ABC restaurant

Friday & Saturday


9am Keynote (education) Outside speaker

10am Education break-out Various

11am Break

11:15pm Education break-out Various

12:30pm Lunch

1pm Free for activities Various

6pm Reception XYZ restaurant

7pm Dinner XYZ restaurant

Sunday


9am Family meetings Separate by family

2pm Depart

Sample agenda – Multi-family retreat


Welcome


Culture/history

Communicate

Governance

Education

Fun


Topics and speakers

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Agenda: sample fun activities

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Sports

Croquet Bocce ball Golf Tennis Volleyball Float trips

Other activities

Paintpictures

Build a bike Build and racecardboard boats

Escaperoom

Winetasting

Service trips Museums


Agenda: sample education topics

• Role of trustee/beneficiary

• Investments

• Tax

• Financial planning/budgeting

• Estate planning

• Technology tools

• Specifics on the business

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PersonalTechnical

• Leadership

• Communication styles

• Active listening

• Emotional intelligence

• Money scripts

• Passion/purpose


Planners: top things for speakers to consider

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They are herevoluntarily

Don’t expect them to knowyour lingo/acronyms

Be interactive

Be transparentTell real stories

Share thehorror stories

Don’t be boring


Best and worst examples

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Best and worst examples from family meetings

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Interactive – let’s learn from each other’s stories

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