Fifteen Differing Perspectives in the Multi-Roles Model©

1. Family (F) = family members who have no role in ownership, governance or management. Examples include spouses, in-laws, young children, and adult family members who may have grown up in a business family and/or feel a sense of attachment to a business owned by their spouses, siblings, parents or children. Typical interests and concerns: family first, history, culture, values, fairness, equality, inclusion. Positioning often includes “fighting for the spouse who works in the business” or desire for future career opportunities for themselves or their children. Others may feel disengaged or resentful of family business conversation at family gatherings.

2. Ownership (O) = owners who are not family members, not involved in governance and not managers in the company. Examples may include shareholders in publicly held family businesses or silent partners, limited partners, or other investors. Typical interests and concerns include “strictly” business performance: rising stock price, profitability and dividends; often focused on short-term results; typically want a professionally managed business free from interference by family issues and battles for control. For non-management level employee owners, such as members of ESOPS, a common concern is job preservation, growth, compensation, and distributions.

3. Governance (G) = people who have a governance role and are neither family members, owners nor managers. These “outside” directors are ideally “neutral and objective watch dogs” though often allied with one or more family member shareholders. Often referred to as “independent directors,” their typical interests and concerns are: fiduciary responsibilities, the “big” picture, representing the shareholders as a group, increasing shareholder value, performance of key executives, strategy, sustainability, meeting potentially diverse shareholder needs, not at the expense of the business, plus succession planning. Can often become embroiled in family conflict and challenged to maintain neutrality.

4. Management (M) = management level employees who are not family members, have no ownership stake and do not have a role in governance. Typical interests and concerns: day-to-day operations, short-term issues, preserving/enhancing their own position in the organization (i.e., job security and career tracking), and autonomy. At the c-level, typical concerns are around strategy and sustainability, meeting the expectations of the board and often competing needs of family member owners. Note: in the Three Circle Model and other models, the word “management” as used here is often referred to as “business” or “employees.”

5. FO = family members who are owners, but are neither managers nor have a role in governance. Examples often include children who have been gifted or inherited shares or non-management level family member-owners. Typical interests and concerns: cash distributions, fairness of employed family members’ compensation and perks, liquidity, employment for self, community perceptions. Some have a keen sense of stewardship and wish to preserve the business for the next generation. Others are self-focused, asking “How can I benefit from this business?” Some are ambivalent about ownership and desirous of exit options. They are frequently in conflict with FOMs, FOGs, and FOMGS.

6. FG = family members who have a role in governance, but are neither owners nor managers. Examples may include retired members of the senior generation who have transitioned ownership and leadership to the next generation. Typical interests and concerns: how business “was,” what they could or couldn’t do, how next generation will “measure up,” possibly their having “let go” too soon. Others are cultural icons and still retain significant informal control and play a major role perpetuating values and guiding the next generation of leaders. Some FGs are spouses of FOGMs to ensure board control. Others may be in-laws with skill sets matched to the needs of the business.

7. FM = family members who are managers in the business, but have neither an ownership stake nor a role in governance. Examples include parents, siblings or cousins of FOGMs or children do not desire or who have not yet been granted an ownership stake. Typical concerns and interests: their own role and responsibility, their future security, fairness, and for some, acquiring an ownership stake and/or a seat on the board. They are often in conflict with FOMs and FOGMs.

8. OG = non-family owners who have a governance role, but are not involved in management. Examples may include individual investors with seats on the board or representatives of venture capital firms. They are often focused on more immediate returns, distributions and a 3-5-year exit/M&A strategy for the business. Their goals may conflict with Fs, FOs, FOMs and FOGMs.

9. OM = non-family member managers who are owners with no governance role. Examples include key non-family employees who have been granted stock in companies where the family typically retains the governance role or where there are many such employees in an equity position, such as in an ESOP. Many are in a publicly owned family business. Interests include job security, dividends and stock growth, and an exit strategy as well as an opportunity for their children.

10. GM = non-family member managers who have a role in governance yet have no ownership stake. Examples often include professional c-level key non-family executives like the Chief Financial Officer or non-family President or CEO. Roles often include mentoring the younger generation and helping to address family differences. They often wish to be OGMs.

11. FOG = family member owners who have a governance role but are not in management. Examples often include retired FOGMs. Others may be family board members with a different career who have a significant ownership stake. Some who are focused on stewardship and long-term wealth creation may conflict with others who are more focused on immediate or short-term rewards. Some need to balance the expectations and needs of FOs and the role of Gs.

12. FOM = family member owners who are managers but are not involved in governance. Examples are common in third generation or older family businesses or in situations where many family members are owner-managers. Role is often accompanied by frustration about not having a governance role.

13. FGM = non-owner family member managers who are involved in governance. Perhaps the least common of the sub-sets, examples may include seniors who have divested their equity. Others may include cousin, spouse or in-law managers with unique skill sets. In some instances, they are family managers with token governance roles. Some are desirous of ownership.

14. OGM = non-family member managers with an ownership stake and a role in governance. Examples often include c-level and other non-family managers who are co-founders or have been granted or purchased an equity position. Their role is often to help keep family members under control and family issues out of the boardroom. They may also be interested in an exit strategy for themselves and an entry opportunity for their children.

15. FOGM = family member owners who are managers and involved in governance. Examples include, the founder, and other c-level family member leaders and next-gen emerging leaders in the enterprise. Their interests are typically the totality of the family and the enterprise.

With special thanks to John Davis, Jane Hilburt-Davis and Judy Green for their constructive feedback.