Plan Development. After the fact-finding interviews, the
mediator will meet with Bob and Bill to help them develop a
SGS leadership Succession Plan covering:
1. Participation in the business by next generation
family members, taking into account education,
qualifications and commitment, with required
apprenticeship and work experience at SGS and/or
third party employment.
2. Mentoring, training and necessary resources
provided by the founders, and involving Jeff Hackett
and Sam Winslow who will be compensated for
3. Decisions on business leadership based on
merit and performance evaluated by non-family
4. If Bob and Bill do not agree on one or more family
member(s) to be their successors, they will look
to non-family leadership starting with Jeff Hackett
and Sam Winslow.
The last important step in successful succession plan development is the meeting with all interested parties to assess
and, if need be, refine the initial plan drafted with Bob and Bill.
Mediation skills can be indispensable when two brothers
are conflicted about whose descendants should lead their
business to continued success.
“Good fences make good neighbors”
–Robert Frost, “Mending Wall”, (1914)
Although Frost may have used the adage ironically, in
the world of family business, boundaries set out clearly in
governance structures can spell the difference for the next
generation between internecine warfare and a smoothly
running business. SGS, like every business, currently has
a governance structure which regulates by whom and
how decisions are made and rewards are distributed. In the
absence of any modifying provision in the charter, bylaws or
shareholder agreement, Bob and Bill, with 80% of the shares
of the company between them, are , as a matter of corporate law, in a position to make effectively all decisions. Among
other things, they would have broad discretion to set salaries
and perks and either to distribute proportionally all or a portion of the profits as dividends (40% to each of them and 20%
to Helen and Larry) or to hold profits in the company.
The Simpson family structure, on the other hand, is an amal-
gam of Bob and Bill’s and their wives’ family culture, tradition
and inherent values. The family and business systems inter-
act with each other, but their goals, while they may overlap,
are different. The family goals typically focus on allowing Bob,
Bill, their sister Hope to live reasonably well themselves as
they mature and to nurture each of their children to attain
success and happiness in life, while the goals of SGS, as a
business, are to be profitable while providing satisfying work
to competent and fairly paid employees with long term ben-
efit to the owners. Helping to resolve the contradictions that
arise as family and business goals conflict is the challenge of
the family business mediator.
After a discussion and tentative decision as to leadership
of SGS in the future, as described in the previous section, the
next tasks for the family business mediator (which may best
be addressed simultaneously with the leadership issue), are
to uncover the issues/problems/needs and interests of each
family member, and to help Bob and Bill and their families
decide whether SGS can be a source of wealth, work satisfaction and security for the next generation, and, if so, what
structures might be useful in the future to avoid and/or regulate conflict among the future owners.
The following steps might be appropriate at this point for
1. Meet with Bob and Bill, together and separately,
as well as with each of their wives, separately and
together with their husbands, to help them each
articulate a long term vision and describe their
family’s long term needs. As some issues by their
nature should generally be discussed only privately,
caucus rules as to confidentiality would continue
to apply to these meetings. The following is a
suggested list of introductory topics:
a. Describe how you see retirement, including
how much income and participation in the
company you each expect.
b. Do you have sufficient other assets so
that if something should happen to SGS
that you would have enough income to live
c. Do you have interests in life other than SGS
so that you can psychologically allow the
next generation to take the helm?
d. How do you intend your assets to be
distributed among your children at the time
of your death and/or your spouse’s death?
e. What do you see as the greatest
challenges facing the family in the next 5
years? 10 years?
2. Meet with each of the children and the new
potential management team to have them describe
their own long term needs and interests. Do they