The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

Cable Bahamas’ chief executive says establishing a family council is critical for seamless succession planning in family-owned businesses where communication among all members is key.

In a webinar organised by RF Bank & Trust, Franklyn Butler, who is also part-heir to the Sir Milo Butler estate, including Milo Butler & Sons Ltd, said that due to his grandfather having ten children - and those children having children into a fourth generation - it was vital to establish a “family council” to ease the process for family general assemblies to decide how the business and estate should move forward.

Mr Butler’s grandfather was the late Sir Milo Butler, the first Bahamian governor-general of an independent Bahamas and also a successful businessman. The Cable Bahamas chief recalled how important business decisions are addressed at council meetings, then shared with the larger family grouping, including in-laws as well as blood relatives who guide the family estate.

He added: “This council is a crew of about eight or ten, often in-laws and others, who are guiding the agenda for the family assembly meeting, and making sure that issues around the non-family assets are being addressed.”

Mr Butler said it was important to focus on the non-business side of family wealth protection. In common with all families, he added that his, too, suffers with members that have personal challenges with substance abuse and mental health.

“The family council often drives that type of support in our family structures, and I would encourage it for any of your family members thinking about the great long-term wealth for your family,” he added.

Sean McWeeney QC, former attorney general and currently a senior partner at Graham, Thompson & Company, warned against overly complex family succession structures and, in particular, creating family councils that are “too big and unyielding”.

He cautioned: “The Latin Americans are famous for this. They want everybody to be in the family council and it’s a recipe for disaster. There needs to be a consensus developed within the family that only three, maybe four or five people, normally an uneven number, will be representative of the entire family and that can be done on a multi-generational basis.”

Mr Butler argued that every family enterprise needs a “family office” dedicated to resolving specific family issues. “Somebody who does the back office administration and helps every family member to see how they’re spending their money, who talks about the performance of the family business and its other assets, and provides any kind of administrative support for any family member who’s hoping to either get in business or who just wants to live,” he said.

The Cable Bahamas chief said some at the top of the family structure can live in a bubble of privilege, and may not be concerned about the welfare of other relatives to the extent they should. More importantly, they may not have an appreciation of how money is made or how to protect the privilege they have and, in turn, spend their money unwisely because they have been taken care of by parents for too long.

Agreeing that family offices can provide that “degree of support” when it comes to school fees, medical assistance and things of similar nature, Mr Butler said families also need to communicate, “establish a communication network, foster love and sharing in spite of family differences”.

He said: “For me, it’s about driving education. Ensure that every future generation, who’s preparing for wealth, understands the challenges in front of them.

“That this is not just an opportunity to be entitled and to drive the nicest car, and to do all the wonderful things that they have grown up with, because they probably spent all their life in business class and now when daddy moves on they can’t travel in business class. They need to understand that that is a privilege, not a right.”