Family Dynamics The Role of the multi-disciplinary Adviser Team

1. Family DynamicsThe Role of the multi-disciplinary Adviser Team The Pride and Passion Presented by Paul Smith Carnegie Management Group

2. Micro / Macro Macro / Micro Business What makes a Family Business tick? It’s all in the Organisational Dynamics Ownership FO BO FBO FB Family

3. Different types of Advisers work in the three systems of family firms - often as if the systems were separate and distinct from one another – eg. Accountants, Therapists, Estate & Financial Planners. However “true” Family Business Advisers are distinguished from other types of Advisers in that they work on the boundaries of these systems, where there are overlaps between the family, the business and ownership/governance. So who is the client? Advisers need to work collaboratively and seamlessly – to the benefit of the client – the Family. The Multi-disciplinary Adviser Team

4. Micro / Macro Macro / Micro Business Accounting & Business Advisory So what is right for your Family Client? Trusted Advisers acting in close collaboration from all relevant disciplines Ownership Estate & Financial Planning Family Business Advisers Family Family Therapists

5. Family DynamicsWilliams Family – What Next?

6. What should we consider – the first step – the Family first, then the Business? To stop & take stock of where this family owned business is at - generational divide, economic circumstance, imploding….. Typically a group of professionals will focus on the numerous technical issues. While these are critical, they must be placed in context and not allowed to dominate the process. To consider the value of a more strategic approach than just fighting bush fires as they occur The family needs a plan – eg does it want to be just a F-o-B OR F-i-B together? Williams Family – What Next? (1)

7. Do the key family members want to explore what could be? Eg. Jim as founder, John & Helen as shareholders & Lisa as CEO. Or just continue on – perhaps. eg. get buy in to a VISION for future of family prosperity A shared vision for which the key individuals will be willing to compromise their personal objectives The role of an Adviser is to get the ball rolling after buy in – to start a family meeting The first and most critical step ‘What is the family vision for the business/family?’ Williams Family – What Next? (2)

8. Family DynamicsWilliams Family Vision and Stewardship Statement

9. The Williams Family “Pillars” are the second and third generation heads of each branch of the Williams Family. Collectively, they form the Williams Family Council. Statement of Custodianship Principles Custodianship imposes an obligation on the Pillars to take, hold, enhance and pass on, together and through their collective efforts, not just a business but also a family investment vehicle that: was created for the purpose of being a family investment vehicle and now exists to benefit current AND future generations of the Williams Family. The William’s Family’s Vision & Stewardship Statement - 1

10. We accept that this imposes clear and onerous obligations on us, including: Nurturing and enhancing the collective experience, knowledge, reputation and wealth of the Williams Family. Nurturing and enhancing the Williams Family brand in whatever it attaches to. Enabling current and future generations to benefit from our accumulated, collective experience, knowledge, reputation and wealth. Inspiring and helping current and future generations to find their own feet and to take ownership of and responsibility for their own achievements and success in life and business. The William’s Family’s Vision & Stewardship Statement - 2

11. Statement by Current Custodians We acknowledge that we inherited Jim’s (our father’s) train set when we inherit his business. We originally commit to improve it and to pass Jim’s train set on to the 3rd generation of our family. We remain committed to passing on a valuable family business asset to our next and subsequent generations. However, we also affirm that it will be our train set that is eventually passed on – in whatever form, shape and fortune it is in after we, the current Pillars of the Williams Family, have performed our duties as custodians of the business, in accordance with the above principles. The William’s Family’s Vision & Stewardship Statement - 3

12. Statement by Current Custodians This affirmation reflects our collective desire and commitment to be a successful family-in-business, over the long term, for the benefit of generations of Williams, even those as yet unborn. We believe this encourages us to work collectively to lead, support and sustain whatever business and investment activities we deem we should support, in the best interests of the whole family, and in accordance with the above principles. The William’s Family’s Vision & Stewardship Statement - 4

13. Family DynamicsWilliams Family – The Way Forward

14. A family business must balance the sometimes conflicting concerns and demands of both the owners’ families and the business itself. Family considerations often overwhelm the strategic realities of the business and hinder the ability to successfully grow – let alone pass the business on to subsequent generations For this business to survive into subsequent generations it should use a two-dimensional planning process: the family council and the business board of directors The model helps the family negotiate the boundary between the world of the family and the world of the business Williams Family – The Way Forward - 1

15. The family council comprises the actual members of the family, including in some cases in-Iaws, young adults, and family members not directly involved in the business. The family council's task: is to chart a course for the family develop a new generation of family members regulate their involvement in the business and align the business with the family's plans The task of the board of directors, composed typically of the owners, key active family members and perhaps key employees andindependent directors is to look at the business independently from the family - focusing on such strategic planning needs as well as business governance and capital needs. It may need to challenge family needs and set limits on such things as income distribution Williams Family – The Way Forward - 2

16. Advisers can guide the council to answer such questions: as who will run and own the business in the future how decisions will be made and what the financial expectations are for those who work and those who don't work in the business Williams Family – The Way Forward - 3

17. The Williams Family will achieve success by: Values and Visioning: who we are as a family, what we believe in, individual and collective goals Strategy Plans: where we're going, as individuals and as a family, and why we want to get there Family Plans: how to achieve our goals; individual and collective commitments and responsibilities; timelines; wills and estate planning; financial and retirement plans Structures: family boards and councils; family forums and other communication processes Williams Family – The Way Forward - 4

18. Family estate management – shareholder agreements, governance agreements, personal and business succession planning documents, trust governance and succession documents. Family Agreements: codes of conduct; family constitutions; shareholder agreements; leadership transition and continuity (succession) plans Value of a Stewardship Culture & the Custodian - the role of a Family Office Williams Family – The Way Forward - 5

19. Four key practices lead to effective intergenerational family governance of wealth: Sustaining Family Connection through Open Communication and a Family Council Building Financial Stewardship through Empowered Boards of Directors Defining Purpose and Clear Agreements with Family Mission Statements and Constitutions Developing Leadership and a Financial Responsibility in Next Generation Heirs THE KEY – A SENSE OF COMMUNITY – FOR THE FAMILY AND THEIR ADVISER TEAM Williams Family – The Way Forward - 6

20. Need more information? Carnegie Management Group Paul Smith – Chief Executive Email: paul@carnegiemg.com.au Visit: www.carnegiemg.com.au www.executivementor.info “Working together we have the minds and the means to get you where you want to be.”