A LETTER FROM OUR FOUNDER
by Ted Beringer
Eleven years ago I was in a life threatening car accident. Less than a mile from my house a deer jumped in front of my car from the side of the road. Instead of making it home from work I ended up on a helicopter to the hospital, my car violently wrapped around a tree, my body battered and my ankle irrevocably destroyed.
Fortunately I survived the accident, my eyes opened to the suddenand unexpected turns our lives can take. In a way no other experience in my life has, that fateful day brought home to me the importance of the work I do.
Business succession planning is a central component of life at public corporations. However, in the family business and family office world, it is often a neglected step child. The stakes are simply too high for that to be the case. It needs to be a top priority, and it needs to be happening today. Here is a practical checklist of what you should be doing
1. Get into the habit of reading your will and checking its provisions for the business. This document governs so many important decisions, yet so often it is out of date. Keep it current.
2. Who is the trustee for the business? For the other assets? Rarely should they be the same. Identify and appoint qualified and appropriate people.
3. The business should never come out of trust. If it is to go to the kids and you want them to control the business, name them trustee.
4. Get your family governance documents in order. A family with substancial assets needs to document exactly how the family enterprise will operate in your absence. Any multimillion dollar organization would carefully spell out exactly who is responsible for what...your family enterprise should not be an exception. Get everything written down so there
is no ambiguity later on.
5. Outside board - family enterprises do better with both inside and outside board members. Time and time again it has been proven that the perspective of boardmembers from outside the family is invaluable.
6. Train the next generation for leadership positions. This doesn't just happen overnight...it can take a decade or more to groom your successors. Get started now.
7. Provide for children not active in the business. They need dollars outside of the business. Family companies fail when you have growth competing with distributions.