Glossary

Accelerator

Short and intensive program offering support and training to entrepreneurs which expedites the development process of a commercialization strategy.

Advisory Board

An advisory board is a body that provides non-binding strategic advice to the management of an enterprise. Unlike a formal board of directors, an advisory board does not have the authority to vote on corporate or fiduciary matters.

Advisory Committee

Group of individuals (outside the entrepreneurial family), who are entrusted by the family and is consulted when making important decisions.

Advisory Council

Any group of people outside the enterprising family that are trusted and consulted when important decisions are being made.

Alignment

Alignment refers to the harmonious relationship between members of an enterprising family as they relate to their respective personal, professional and business objectives.

Business Continuity

Business continuity is a blueprint to help ensure that business processes can continue during a time of critical transition, emergency, or disaster. Such events might include a change of leadership or any other case where business is not able to occur under normal conditions.

Business Vision

Business vision refers to the mental image and guiding transformational initiatives of what a company wants to become at some point in the future, based on the goals and aspirations of its personnel. A business vision and, by extension, a company vision statement, can serve as a foundation for a broader strategic plan.

Chief Learning Officer

A chief learning officer (CLO) is a senior executive who ensures that a company’s corporate learning program and strategy supports its overall business goals. A qualified CLO propels strategy and aligns the development of workers with overarching business goals.

Communication

Bearing in mind your message and environment when communicating with family members to avoid misunderstandings, conflict, and inappropriate behavior.

Council of Elders

A council of elders is a group composed of eminent persons who play advisory roles in a family enterprise. An elder may be a senior family member who has transitioned out of the daily running of the company but retains an “emeritus” status for the benefit of retaining their valuable experience. The council can be composed of both family and non-family members.

Disruption

In a family enterprise, disruption is any disturbance that interrupts an event, activity, or process. This can often apply to family members (i.e. decline in health, injury, or sudden death) just as well as to market disruptions, where markets cease to function normally, for example, a stock market crash. Also, Innovative technologies (ride-sharing apps, etc.) disrupt by altering the way consumers and industries operate.

Documented Exit Plan

A documented exit plan is a clearly stated set of business and personal goals that a business owner wishes to achieve in his or her exit. It should be documented in writing and include the tactics and steps required to effectively realize those goals.

Entitlement

The governance decision that members of the family will naturally inherit ownership or leadership within the enterprise.

Estate Planning

Estate planning is the planning and naming of whom you want to receive the things you own after you die. It is the preparation of tasks that serve to manage a person’s assets in the event of their incapacitation or death. This includes the bequest of assets to heirs and the settlement of estate taxes.

Experienced Facilitators

Experienced business experts of rich and varied backgrounds who support the intrapreneur throughout the duration of his/ her Intrapreneurial journey.

Fair Process

The governance structure where the enterprising family will enforce a system of meritocracy rather than entitlement.

Family Business Advisor

Any person outside the family business that is trusted and consulted when important decisions are being made.

Family Business Basics

There are six generally accepted key principles that most successful enterprising families will develop over time and follow. There are; 1) Governance, 2) Communication, 3) Succession Planning, 4) Transparency, 5) Responsibility, and 6) Accountability. These principles form the bedrock of successful family businesses. If you’ve established similar practices, but have let them lapse, renew your efforts to give your business family the best chance at continued success.

Family Business Roles

Often categorized into ownership/management/family, family business roles are any role played by a member of an enterprising family. Ex: Mother, Chief Emotional Officer.

Family Code of Conduct

A Family Code of Conduct is a written set of guidelines, rules, or expectations that govern the behavior of family members, usually during Family Meetings. Codes commonly focus on explicit rules for harmonious communication, however, guidelines can extend into operational actions: “Make decisions together without drawing in third parties.” Variations include Sibling Code of Conduct.

Family Constitution

A Family Constitution (or family charter) is a written statement that serves as a record of the family’s heritage, culture, hopes, and ambitions for future success, as well as a plan for how to achieve them. The constitution sets out the rights, values, responsibilities, and rules that apply to stakeholders in a family enterprise.

Family Council

A Family Council is the body that represents family members related to an enterprise. The council functions as an official forum for communicating important issues with family members, such as training, remuneration, or challenges related to the coexistence of the family and the business, among others.

Family Employment Policy

A family employment policy is designed to help family members understand their relationship to the business. The purpose is to define the criteria and procedures governing how Family Members enter the company as career employees. The plan should provide transparency and contribute to the long-term success of the family and the company (i.e. family remuneration).

Family Learning Strategy

A family learning strategy refers to the conscious implementation of formal measures and resources (both financial and emotional) by the family to pursue learning practices that promote intergenerational business longevity and familial harmony.

Family Learning Champion

A family learning champion is a family member who vigorously encourages various forms of family learning so as to equip all family members with skills that promote enterprise growth, family harmony, and family ownership. In a sophisticated, family-owned enterprise, a learning champion is synonymous with a chief learning officer (CLO) who is usually a senior executive. A CLO ensures that a company’s corporate learning program and strategy supports its overall business goals.

Family Meeting

A family meeting refers to a regularly scheduled forum where family members meet and discuss key matters that relate to both business and family. Meetings are meant to facilitate relationship building and erase the distinction between those who work and do not work in the family enterprise.

Family Purpose

A family purpose represents an enduring and stable commitment, shared by multiple family members, to actively engage in making a meaningful difference in some aspects of the world beyond the family.

Family Retreat

A family retreat is a vehicle through which families can unite when it is necessary or helpful to address common interests. During a retreat, families can share financial information and attend meetings that have separate family and business agendas for the purpose of reducing tensions that arise from the overlap of family and business interests.

Family Shareholders’ Agreement

A shareholders’ agreement is a document for the shareholders in a business (and the underlying business itself) to prevent disputes in the event that the number of shareholders increases as the next generation becomes involved in the business. The agreement is a contract between shareholders and provides protection around ownership and sets out procedures to be taken in relation to certain decisions, for example, provisions relating to the composition of a board of directors.

Family Values

Family values refer to the moral and ethical principles traditionally upheld and transmitted within a family, such as honesty, loyalty, faith, and anything that is permanent and a beacon. They are cultural and pertain to the family’s structure, function, roles, beliefs, attitudes, and ideals.

Family Vision

A family vision refers to the mental image of where an enterprising family expects its business to be at some point in the future, based on common goals and aspirations of family members. It may take form of a documented description of what the family intends to accomplish long term.

Genogram

A family diagram (tree) that maps out your family and their involvement in the family business.

Governance

Governance refers to the process of planning, developing, and implementing policies and structures within a business. For example, an advisory council is a governance instrument that provides non-binding strategic advice to the management of an enterprise or foundation.

Holding Company

A holding company is a corporation that owns enough voting stock in another corporation, limited liability company, or partnership to control its management and policies.

Independent Director

An independent director is a member of a company's board of directors that the company recruits from outside the organization. Independent directors do not have ties to the company’s current way of doing business and can bring new insights to a team.

Innovation

Bringing big new ideas and opportunities for growth and development to the enterprising family.

Intergenerational Partnership

A two-way relationship that allows and encourages personal development between a rising generation member and a first generation member –in the context of a mutually beneficial project.

Intrapreneur

The individual at the head of the intrapreneurial project. He/she possesses an unwavering will to ensure the success of his / her project. Ultimately, the success of the project lies within the hands of the intrapreneur.

Intrapreneurial Family

A new project funded and overseen by the family business. The intrapreneur sets up an intrapreneurial project with the financial support and advice of the parent company, enabling it to participate in the growth of the family business.

Intrapreneurship

Applying entrepreneurial activities within the family enterprise, specifically encouraging the next generation to innovate within the family business. Ex: diversifying the product line

Intraprise

The result of an entrepreneurial activity within an established organization. The intraprise is driven by the intrapreneur and takes advantage of existing resources with untapped potential. Its sector of activity may be related to the main activity of the host company (such as a new division) or completely separated (a “spin-off”).

Junior Board

A junior board is a body of young people who provide support to a company’s leadership in order to carry the business’s mission forward. Some family firms use junior boards or “shadow boards” to simulate the board experience for the next generation. Junior boards are sometimes referred to as associate boards, youth boards, youth councils, or youth leadership committees.

Keynote Speakers and Entrepreneurs

A renowned and inspiring entrepreneur who shares his / her experience and advice with the cohort of participants in the intrapreneurial Initiative in intimate settings.

Leadership

Refers to any role in the business or family where the member has the skills, respect, and expertise to influence change within the family or business.

Learning Initiative

As a precursor to a learning path (a self-motivated and voluntary sequence of education initiatives), a learning initiative refers to any course, workshop, organized learning experience or activity a family member undertakes towards improving oneself in a family business context.

Learning Path

A learning path is a sequence of courses that allows a learner to master a topic in small steps. The path can fall into the context of lifelong learning, where education is voluntary (rather than compulsory) and self-motivated, with the main goal being to improve personal or professional development.

Legacy

Creating an honorable effect and memory around the family enterprise that will live on.

Life-Cycles

A natural evolution of growth that can be applied to the enterprise and the enterprising family.

Mentor

Mentor or mentorship refers to a two-way relationship that enables and encourages personal development, often between family members within an enterprising family or with a knowledgeable non-family member.

Mentorship

A two-way relationship that enables and encourages personal development, often between family members within an enterprising family or with a knowledgeable non-family contact.

Meritocracy

The governance decision that members of the family will naturally inherit ownership or leadership within the enterprise.

Non-Executive Director

A non-executive director is a member of a company’s board of directors who is not part of the executive team. He/she does not engage in day-to-day management of the organization, but is involved in policymaking.

Owners' Council

An owners’ council is a body that represents a group of owners with a focus on understanding the impact of shared ownership on shareholders, family, and the family business itself. Owners’ councils do not substitute for corporate boards or family councils. Owners’ councils represent shareholders, especially when the definitions of “family” and “shareholders” are somewhat different from one another.

Ownership

Being an owner is more than just holding shares to a company, it is sharing the vision of the company with the intention of long-term success.

Parent Company

Company where the intrapreneurial project will take place. This parent company allows the intrapreneur to utilize its technological, human and financial resources to facilitate the launch of their project in order to increase the likelihood of its success.

Personal Development Plan

Personal development planning is the process of creating an action plan based on awareness, values, reflection, goal setting, and planning for personal development within the context of a career, education, relationship, or for self-improvement.

Philanthropy

The act of giving back, which often contributes to building a legacy.

Private Equity

Private equity is an alternative investment class and consists of capital not listed on a public exchange. Private equity investors typically invest in private companies or engage in buyouts of public companies. Private equity capital is often used to fund new technology, make acquisitions, and/or strengthen balance sheets.

Rising Generation (Next Gen)

Member of the business family that is part of the next generation of leaders who instills curiosity and innovation within the family business.

Shareholders' Agreement

A shareholders’ agreement is a document for the shareholders in a business (and the underlying business itself) to prevent disputes in the event that the number of shareholders increases as the next generation becomes involved in the business. The agreement is a contract between shareholders and provides protection around ownership and sets out procedures to be taken in relation to certain decisions, for example, provisions relating to the composition of a board of directors.

Shareholder Liquidity

Shareholder liquidity refers to the cash readily available to a shareholder in a company. Periodically shareholders in family-owned companies need some liquidity. Such needs do not necessarily require the sale of the business. However, friction can emerge as a result of the capital requirements of a growing company and the liquidity needs of its shareholders.

Spinoff

A spinoff is the creation of an independent company through the sale or distribution of new shares of an existing business or division of a parent company.

Strategic Plan

A strategic plan or strategic planning is a systematic process of envisioning a desired future, and translating that vision into broadly defined objectives and a sequence of steps to achieve them. Strategic planning begins with the desired end and works backward to the current status.

Succession Planning

The planning process for the successful integration of the next generation into the enterprise and transitioning of ownership and leadership.

Transitioning Ownership and Leadership

The process of incorporating the next generation into the enterprise to shift the responsibility of ownership and/or leadership. This is an important step in ensuring the business is successful in growing through life-cycles. It is essentially the execution of the succession plan developed.

A Trust

A trust is a fiduciary relationship in which one party (the trustor or person who creates the trust), gives another party (the trustee or person in charge of the trust), the right to hold title to assets for the benefit of a third party, the beneficiary. Trusts are established to provide legal protection for the trustor’s assets, for example, to avoid or reduce inheritance or estate taxes.

Wealth

The accumulated value of both tangible and intangible resources, financial or other.