Glossary
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B
Business Family
Business family means a family, or a family sub-group, with an entrepreneurial orientation which owns, controls, and contributes to one or multiple commercial or philanthropic endeavors.
C
Chief Learning & Development Officer
A Chief Learning and Development Officer (CLDO) acts as a strategic and trusted advisor to enterprising families, advises, accompanies, and co-creates, an enterprising family's long-term ownership and leadership learning and development and governance journeys to fulfill its financial and non-financial strategic goals. nuclear family
Commonwealth
Commonwealth refers to any group of persons united by some mutual interests or founded for the common good or advantage.
E
Enterprising Families (EF)
An Enterprising Family is a multigenerational organization of many kin. It is focused on growing its family capital, is willing and able to socially cohere, and effect a socially, politically, and/or economically shared purpose for many generations.
Enterprising Family Governance
Concerns three types of governance:
1) family governance encompasses the family system of the enterprising family;
2) ownership governance is constituted for the owners of the enterprising family fortune; and
3) corporate governance addresses the governance needs of the enterprising family`s operating entities including the family office, family-owned investment companies, and private foundations.
Entitlement
Entitlement refers to the individual's belief in what he or she "deserves".
F
Family Business
Family business usually refers to a single business owned and operated by family members who are contributing to the business their specific skills and time, and may be motivated by a desire to transfer to the next generation of family members.
Family Champion
Family champion refers to a current or next-generation family leader who initiates and catalyzes the enterprising family non-active family members in their enterprising family responsibilities. This person acts as a change agent and primary sponsor of the family's change management journey.
Family Council
Family council means a formalized form of family governance and is generally operated within a relational type of governance framework. Often described as a structured forum inclusive of multigenerational family members, conducted within periodic meetings. Viewed as an opportunity for family members to communicate with ownership family group (Owners’ Council).
Family Council Chairperson Responsibilities
May include
1) providing corporate updates to family;
2) acting as a corporate board observer or family business board member;
3) managing family conflict/tension points and family business/family office management relations;
4) developing family strategy derived from family vision;
5) Influencing board of director selection process.
G
Genogram
Genogram refers to a diagram illustrating temporally an enterprising family’s members, how they are related genealogically and in the context of significant personal and family events.
H
Human Capital
Human capital represents the stock and flow of knowledge, skills, and abilities of individual enterprising family members.
M
Meritocracy
A meritocracy refers to the idea that an individual's position or possessions should reflect the combination of its ability and effort instead of being an inherited right.
O
Owners’ Council
Owners' council means a type of ownership governance for those family members who possess the legal title to various business family fortune components.
Owners’ Council functions
Some of the Owners’ Council’s functions may include:
1) development and communication of the enterprising family ownership strategic guiding principles to the family directors at the operating company/family office/investment company board level;
2) making sure the voice and views of the Family Council are considered for integration into the business family ownership strategic guiding principles;
3) preventing family members and non-active owners from interfering or spanning into the operating company/family office/ investment company board or managerial levels because they might think they have the right to do so;
4) formulating and communicating dividend policy expectations aligned with principle of financial conservatism to operating company/family office/investment company’s board of directors;
5) managing dividend policy expectations with family council;
6) assisting family council to prioritize philanthropic objectives and activities.
Ownership
Ownership refers to the bundle of rights to appropriate, to use, and to transfer obtained from possessing an object, resource, or organization.
P
Psychological Ownership
Psychological ownership, unlike legal or physical ownership, refers to the attitudinal disposition of attachment which grows out from the possession of an object like a good, a resource, or organization.
R
Rule of 92
The rule of 92 refers to the estimated 92% of enterprising families who are materially impairing their family wealth and wellness within 3 family generations.
S
Social capital represents an individual’s or group’s opportunities and abilities to capture benefits by virtue of membership in social networks or other social structures.
Stewardship
Stewardship means the extent to which individuals freely suppress their self-interests to prioritize others' welfare over the long term.
W
Wealth
Wealth represent the value of all tangible and intangible assets owned by an Enterprising Family or other entity.
Wellness
Wellness refers to a state of mental and physical health sustained by activities, choices and lifestyles. Wellness is a common concern and goal in enterprising families.
Social capital