Our Business Consulting advisors answer a recent question one of them received, below:
Question: I want to pass the family business to my children, but some of them aren’t in the business. How do I determine what is fair?
Answer: One challenge we’ve seen in this situation is the friction between choosing the best steward for a company while maintaining family relationships. We teach that next-generation leadership is best left to family members actively involved in the business. Family that has chosen not to be actively involved is, logically, not prepared to run the business. If you believe in the stewardship model, where leaders are stewarding a company that belongs to God, your job as leader is to find the best steward to continue the business’s Kingdom impact. This means a leader who is aligned with your beliefs and who is willing and equipped to run the business.
One solution is to set expectations from the start. If you establish the business as one that will follow the stewardship model, expectations are set regarding things like being active in the business and living a Godly lifestyle. This gives the current owner a chance to communicate expectations and equip the next generation for stewardship. The next generation can then make choices, knowing the implications of their choices.
When expectations have not been set in advance, there are still options for parents to, as we like to put it, love their children equally but treat them uniquely. Children who have been involved in the business and prioritize the company’s Kingdom impact may get business stewardship responsibilities. Children who make other choices for their lives may get real estate or cash, as managing these types of assets has different implications than managing a business, which impacts people. In this way, parents have the opportunity to be fair as they express their love for each of their unique children.
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