In my Family Business Management class at Baruch we are now in the process of scheduling a family meeting. One of the most important practices of any successful multi-generational family enterprise, family meetings are a form of governance. They are forums for the discussion and establishment of critical procedures and policies for managing organizational processes and relationships.

Whether a family enterprise is in its second or fifth or thirtieth generation, family members must come together to discuss the unique needs and challenges that face individuals within each of the three family business subsystems, i.e. the family, the business, and the ownership of the business.

These meetings are all about the family talking about the family in the context of the business, but not about the business per se. The conversations may include working out policies for bringing the next generation into the business. For example, the policy might require that next generation members work somewhere else after completing school, and prove themselves there before returning to the family business. Other conversations may be about the children’s career interests or how the demands of the business impact upon the family.

Our class will be holding a “family meeting” based on a case study of a second- generation CEO announcing his intention to retire. There has been no prior succession planning. At stake are the future of the company, the equity of the family members who have ownership in the business, and continued harmony within the family itself. Armed with a better understanding of best management practices than most family businesses have, students take on the roles of the family members in the case.

The founder of the business being discussed passed leadership to his oldest son who is now planning to retire. Ownership of the business went equally to the founder’s five children. The second oldest son of the founder is the only other second-generation sibling working in the business. Both have a third-generation son working in the business.

The roles the students will enact include all five current second-generation family members, the third generation cousins, including two contenders for CEO. There are also a fourth-generation cousins who look forward to their own leadership roles in the future, as well as the intrigue of a disenfranchised equity owner.

The outcome sought from the role play is a strategy and process for selecting the next CEO. Inherent in this is the question of who will lead the family in the next generation, and how equity will be handled as the family grows.

During the role play, students will learn to navigate the emotional challenges of leadership, family and self-interest to arrive at a solution that supports multigenerational success.