A family with four adult children does not need four equal positions at the top of its business. One child may want to lead, another may prefer to remain an owner without working there, and others may pursue different lives. Their responsibilities, authority and rewards within the business can reasonably differ.
Wanting the children involved may justify offering them work experience. But putting one child in charge also requires confidence that the child can do the job. The wish to support family participation does not, by itself, establish who should lead.
An INSEAD working paper describes concerns about who gets a chance to join a family business and how family members’ work is judged. In one family, an experienced manager could not be considered for work in the business his great-grandfather had founded: management positions were reserved for male descendants carrying the family surname. In another, a manager working successfully elsewhere hesitated when his uncle invited him into the family business because he wanted his performance assessed by the same standards as non-family managers. One wanted a chance to be considered; the other wanted confidence that his work would be judged fairly.
A founder may prefer one of their children because years of working together have built trust. That relationship may reasonably carry more weight than another child’s stronger record elsewhere. But preferring the child they know well does not show that the other child lacks ability.
One child may have gained both experience and the founder’s trust through opportunities the family never offered to an interested sibling. The more experienced child may still be the right person for the job. But choosing that person today does not show that the family was fair when it offered those earlier opportunities to one and not the other.
Family members who work in the business may have greater access to company information than those who do not. The IFC’s Family Business Governance Handbook identifies this difference as a potential source of conflict. Consider two sibling owners: one is the company’s chief executive, while the other works elsewhere. The chief executive may need detailed staff assessments to manage employees. The sibling working elsewhere does not automatically need those files, but should still receive the reports due to them as a shareholder. The management role explains the additional access; it does not justify withholding shareholder reporting.
Before promising a role, the family can discuss why it may go to one child rather than another and what authority comes with it. Those interested in the role can question the reasons or correct assumptions about their interests and experience while there is still time to reconsider the choice.
The same boundary applies to family decisions outside the business. Being chief executive does not, by itself, give someone the final say on an elderly parent’s care. A family can give one member greater authority at work without giving that person priority in every family decision. Different business roles need not become a ranking of who matters in the family.