Fairness: Establishing The Principles #succession

Richard Shrapnel's Orienteering Succession blog

Fairness is best achieved through transparency, clear process and participation. If everyone knows on what basis decisions will be made, have had the opportunity to speak into the ‘rules’ and be heard openly, and can see how a decision has been reached, then you are on a sound footing to be fair and achieve harmony in the family.


Active Knowledge Questions:

How do you ensure that everyone in your family has had the same opportunity to speak into how succession will work? And feel that the process has been fair.


In last week’s posting, I spoke to the fact that equity for family members in succession does not necessarily mean everyone receives exactly the same. Rather it means that everyone receives what is fair. And that the process to achieve this outcome is to firstly set principles, secondly apply them and then review the outcome for fairness.

And if you then think the outcome is not fair, go back to your principles and see why they may have delivered an outcome that seems inequitable. Don’t just change the outcome but understand why the principles you set are delivering a result that surprises you. And if necessary, change the principles and then reapply and reassess.

Commencing with principles first will remove the perception of bias if done correctly. You see, if I set principles and ask whether they are fair, I’m not yet looking at how they may translate into dollars. Typically, when dollars are discussed at the outset, people look simply at the dollar sums and expect them to be equal.

To arrive at a set of principles that have the potential of being fair:

  • Involve all family members that your decisions may impact early in the process.
  • Establish, explain and seek contribution to the basis/principles/values upon which you will make your decisions.
  • Explain to them what you are seeking to achieve, ask them to reflect and then provide you with their considered thought.
  • Consider the impact that your decisions may have on individual family members and discuss this directly with them.
  • Always keep everyone informed and maintain an open dialogue.
  • Make sure that you engage with and include your spouse/partner in these discussions as they will be one of your most trusted advisors.
  • Reach a decision after considering everyone’s input, seek to be fair, communicate it and if necessary, explain your reasoning.

Often this process is incorporated into the development of a family charter. And no matter how good your relationships are with all family members, consider using an independent succession advisor to meet with family members and develop these principles.

Family relationships can always be messy, but a visitor, a professional advisor, sitting at the dinner table can bring a peace to the family and allow fairness to be found. And of course, harmony can then follow.

Next week, we will look at what matters a set of principles should address to achieve fairness.

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All the best in the success of your business,

Richard Shrapnel