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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
PwC | Leveraging family meetings
PwC | Leveraging family meetings
Family governance
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PwC | Leveraging family meetings
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.
PwC | Leveraging family meetings
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
PwC | Leveraging family meetings
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
PwC | Leveraging family meetings
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
PwC | Leveraging family meetings
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
PwC | Leveraging family meetings
Purpose of family meetings
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PwC | Leveraging family meetings
What is a family meeting?
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Business meetings
Monthly family lunches
Quarterly family gatherings
Annual retreats
PwC | Leveraging family meetings
Purpose of family meetings
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Build familyunity andcohesion
Establish/buildfamily legacy
Govern
Educate
Communicate
Have fun
PwC | Leveraging family meetings
About family meetings
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Participation
Frequency
Locations
Length
Funding
Facilitation
PwC | Leveraging family meetings
Sample agenda
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PwC | Leveraging family meetings
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
8am Breakfast Café room
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
8am Breakfast Café room
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
PwC | Leveraging family meetings
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
Familymeetingcomponents:
Welcome
Activities/icebreakers
Culture/history
Communicate
Governance
Education
Fun
PwC | Leveraging family meetings 17
Thursday
Arrive at resort
7pm Family dinner ABC restaurant
Friday & Saturday
8am Breakfast Café room
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
8am Breakfast Café room
9am Family meetings Separate by family
2pm Depart
Sample agenda – Multi-family retreat
Familymeetingcomponents:
Welcome
Activities/icebreakers
Culture/history
Communicate
Governance
Education
Fun
PwC | Leveraging family meetings
Topics and speakers
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PwC | Leveraging family meetings
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
PwC | Leveraging family meetings
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
PwC | Leveraging family meetings
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
PwC | Leveraging family meetings
Best and worst examples
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PwC | Leveraging family meetings
Best and worst examples from family meetings
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Interactive – let’s learn from each other’s stories
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