Typical roles in a family trust company (“FTC”) include Directors, Officers and Committee members. An FTC’s Board of Directors is frequently comprised of directors from each family branch, called Family Branch Directors, allowing them the opportunity to demonstrate leadership skills outside of the family business.  In addition, two optional committees – an Education Committee and a Family Engagement Committee – can educate family members and plan ‘family glue’ activities to keep the family connecting beyond a shareholder meeting format. With this broader breadth of opportunities, more family members may find an opportunity of interest  that matches their skillset, providing them a platform to engage and shine within the family enterprise. 

When it comes to family governance, transparency and consistency of shared information can go a long way in creating family harmony. Humans have a tendency to “fill in the gaps” when they don’t have complete information – frequently filling those gaps with incorrect information. As the family continues to grow, there are more family members that may have disparate information potentially leading to distrust. The FTC’s reporting and family representation on their Board of Directors can quell the passing of misinformation and provide the foundation for consistent sharing of information.

Under the FTC umbrella, a family governance plan can define the family’s mission, vision, and values and set forth specific family by-laws or code of conduct.  Most importantly, the family can set forth family policies for employment, education, and conflict resolution to govern the family’s continued involvement together. The FTC can also play a role in answering critical family questions about shareholder transitions such as the following:  Is the future ownership of the family company clearly defined? How will shares pass through future generations?  Where will shareholder decision making be vested for current and future shareholders?

In addition to being involved in corporate governance, an FTC also provides a vehicle by which family members (usually the older generation) can guide the rising generation, engaging members through both social and educational opportunities. For example, an FTC can plan regular gatherings of family members for both social and business interactions, distribute a family newsletter, sponsor family trips, and encourage philanthropic endeavors. All of which create the opportunity for the older generation to pass along family values, traditions, and heritage to the rising generation.