STEP
Gloucester and Wiltshire Branch
Families at War –
mediating trust, estate and family
business disputes
Ian Marsh TEP
familydr
Royal Agriculrural College, Cirencester
3 March 2009
A question (or 3) for you
How do you deal with conflict in your family
business?
How well does that work for all concerned?
Would everyone else concerned agree with
your first two answers?
Royal Agriculrural College, Cirencester
3 March 2009
Conflict is inevitable …
I am in conflict if I believe that you and I have
incompatible goals and that your actions will
interfere with me achieving mine – and I
cannot just accept that.
Royal Agriculrural College, Cirencester
3 March 2009
The risk of destructive conflict
(UK - 2006)
2 out of 5 marriages end in divorce
1 in 4 families fall out over a will
 42% of siblings never talk again
 20% never talk to their mother again
11% make a will to block inheritance
Only 30% of family businesses make it to the
second generation, and only 13% to the third
Royal Agriculrural College, Cirencester
3 March 2009
The cost of destructive conflict
For the family
 Loss of health, family and fortune
For the trustee
 Loss of trust and opportunity
 Reputational risk
For the adviser
 Loss of clients
Royal Agriculrural College, Cirencester
3 March 2009
Sources of tension
Sibling rivalry
Generation gap/digital divide
Workers v investors
Bloodline v in-laws
First family v second family
Family v professional management
The vision thing
Royal Agriculrural College, Cirencester
3 March 2009
Nothing is ever about what it’s about
Relationships
 How do I want to be treated by others?
Saving face
 Who am I – and how can I preserve that?
Process
 How will we communicate and make decisions?
Royal Agriculrural College, Cirencester
3 March 2009
An anatomy of conflict
Perceived threat
Failed communication
Building alliances
Going critical
Royal Agriculrural College, Cirencester
3 March 2009
The big bang
Any change – or threatened or rumoured
changed, eg:






Death
Separation/divorce
Managerial succession
Ownership succession
Proposed sale of the family business
Restructurings and reorganisations
Uncertainty, eg global financial crises
Royal Agriculrural College, Cirencester
3 March 2009
“Many people fantasise
secretly about revenge. Few
carry it out. Most hire
lawyers instead.”
Kenneth Cloke, Mediating Dangerously
Royal Agriculrural College, Cirencester
3 March 2009
How could you do it better?
 What do you want to achieve – and why?
 Can you do it without the other person?
 If not, what do you need them to do?
 What do you need to say or do, for them to do that?
 Put yourself in their shoes
 Why would they say no?
 What must you do to change their minds?
 Get help
Royal Agriculrural College, Cirencester
3 March 2009
Some golden rules
 Take responsibility for the problem
 If you don’t “they” control your destiny
 Assume nothing
 Assumptions are dangerous – and usually wrong
 Be curious
 You can’t change somebody’s mind if you don’t know
what’s in it
 Listen
 You have twice as many ears as mouths for a reason!
Royal Agriculrural College, Cirencester
3 March 2009
The role of good governance
Agree now how to resolve future differences
Conflict diagnosis/audit
Designing an effective process
Getting people to buy into it
Getting people to use it
Royal Agriculrural College, Cirencester
3 March 2009
And if all else fails?
Park the tanks on the lawn if you have to
But don’t abandon diplomacy
And remember –
 30% of no-lose cases do lose
 Judges can’t sign peace treaties
Royal Agriculrural College, Cirencester
3 March 2009
How one family say they deal with
conflict
“Fortunately it never happens”
“We’re very democratic - I have 51%”
“I’m a great believer in consensus”
“We talk a lot, and then Dad does what he
wants”
Royal Agriculrural College, Cirencester
3 March 2009
Back to you …
How do you deal with conflict in your family
business?
How well does that work for all concerned?
Would everyone else involved agree with your
first two answers?
Royal Agriculrural College, Cirencester
3 March 2009
Contact Ian Marsh at
familydr
Central Court
25 Southampton Buildings
London WC2A 1AL
tel: +44 (0)20 7083 7027
fax: +44 (0)20 7083 7028
e-mail: [email protected]
Royal Agriculrural College, Cirencester
3 March 2009