Beyond Consensus: Why Family Offices Need Alignment, Not Agreement

The Real Test of Alignment

The third Family Office Align conference, held in September, put the intersection of the family and the family office at the center of discussion. According to Family Business Magazine, three speakers from the stage remarked that "Align" was the perfect word for what families and their family office executives need to accomplish together.

The same principle applies to family businesses. Owners must continually work toward alignment on values, vision, goals and the fundamental questions that come with shared ownership: why the family owns the business together, what it should accomplish, and what expectations govern growth, risk, distributions and reinvestment.

What Alignment Is Not

Alignment is frequently confused with agreement and harmony, the magazine argues. Healthy families sometimes disagree, and as they grow across generations and become more complex, the potential for disagreement increases. Family members can hold very different views on how much capital to reinvest versus distribute, how quickly to grow, how much risk to take, who can work in the business and under what conditions, who should lead the company or serve on the board, and even whether the family should remain owners.

Alignment is understanding what we are trying to accomplish together and trusting how we will make decisions when we disagree.

Silence is not agreement, and agreement is not alignment, according to the publication. A family can appear harmonious because difficult subjects are avoided. A next-generation family member may disagree with a parent but decide the issue is not worth raising; one branch may keep concerns about the business direction private to avoid conflict. From the outside, the family may look united. Underneath, resentment can accumulate.

Governance as the Mechanism

Governance helps drive alignment. Boards, family councils and owners councils are valuable not because they eliminate disagreement, but because they give families a healthy way to work through it. Governance establishes who gets a voice, what principles guide a decision and what happens after a decision is made.

It also provides a way to document where the family is aligned, including through annual shareholder expectation documents provided to the board and management, as well as family constitutions, vision statements and other agreements. Putting alignment in writing helps ensure everyone works from the same understanding rather than assuming everyone is on the same page, and it creates something the family can return to when difficult decisions arise.

Permission to Disagree

Real alignment also requires permission to disagree. If family members do not feel comfortable challenging the senior generation, questioning a sibling or expressing a different vision for the family's future, the family is not truly aligned but simply avoiding disagreement, Family Business Magazine writes.

The publication notes it was pleased that the Align conference name resonated so strongly. Families, it argues, do not need the unrealistic expectation that everyone will always agree. They need something more durable: the ability to voice different views, make a decision through a process they trust and then continue working toward shared goals. That is the kind of alignment that can endure across generations.