Who is the Family Business Client?

Tom Whiteford is the CEO and owner of a second-generation family business that was started by his late father.  Tom’s brother never entered the business and his father’s decision to leave all the shares to Tom resulted in a rift between the two brothers that was never resolved. 

Tom and Mary have three children.  The youngest, David, joined the business straight from school while his siblings Eleanor and John pursued careers elsewhere, married and started their own families. 

Tom thinks he would like to retire, but he feels financially vulnerable because over the years he has re-invested a lot in the business.  In addition to looking after their own financial needs and worrying about how Tom will spend his time after he retires, Tom and Mary are concerned about how best to equalise their children’s inheritance. 

A friend has suggested to Tom that obviously all the shares should go to David because he works in the business.  However, Tom remembers how this approach resulted in a split with his brother and he does not want the same thing to happen to his family. Tom and Mary would far prefer to divide the shares equally among their children on the grounds that equal is the same as fair, isn’t it?  In any case, maybe Eleanor and John will one day come home and work in the business, an outcome that Tom and Mary promote at every family get together. 

To complicate matters further, Tom is excited by a new business opportunity that will require fresh investment, but in Tom’s opinion, which he has not told anyone, David is not experienced enough to drive the business forward on his own and still needs help and guidance from his father.  However, Tom knows he is not getting any younger, a view most recently confirmed by his doctor who recommended that Tom should take things a bit easier. Tom decided not to share the doctor’s advice with Mary because it would worry her.

Who is the Client?

In this case, who is the client?  Is it Tom?  Does this mean Tom as the CEO, or Tom as owner, or the person who happens to be both of these things and, at the same time, husband, father and grandfather and someone who is worrying about his health and what he is going to do with the rest of his life after he has stopped devoting so much of his energy to the business? 

Or, since any decision about the future will affect Tom’s whole family, is it reasonable to suggest that they are included as clients, not forgetting, of course, the business itself. 

In reality the family business client is always a complex emotional and economic system in which many interests are inter-acting. Advisers who want to embrace this reality will need to develop new knowledge and be willing to work in multi-disciplinary teams that provide the range of skills that every enterprise needs.