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The Sibling Partnership

Provided by the Business Families Foundation, Content Partner for SME Toolkit


A sibling partnership is a partnership of brothers and sisters who inherit – totally or in part – a family business developed by the previous generation. There may be other owners in the partnership from previous or succeeding family generations, but typically the ownership and leadership is concentrated among the siblings from the same generation.

The most crucial challenges for a sibling partnership are to manage: entitlement and team leadership. Sibling partnerships often struggle with defining what they view as rights versus responsibilities and ownership versus stewardship of the business(es) and family assets.

Often siblings feel that they have rights and entitlement over the legacy of the previous generation(s); they require education, coaching and mentoring to recognize that they also have responsibilities as owners of the family business(es) and assets. In their education process these brothers and sisters need to be fully aware that they possess not only ownership rights, but also stewardship responsibilities that include taking care of the business and making it better for generations and employees.

Siblings who share ownership can be second generation members of a family business, can also have founded their own business, or bought out their cousins. In all cases, joint leadership among siblings requires the nurturing of: strong sibling ties, open communication channels and good communication skills, well-articulated conflict management and conflict resolution mechanisms, one accepted leader amongst equals and team leadership over key decision-making processes.

Most importantly, a team of brothers and sisters cannot lead in the same way an entrepreneurial owner-founder would. Therefore, they must not only find their own style of leadership compared to their predecessors, but learn to play servant leader roles among themselves, to lead not only for, but with others.

Key concerns of a sibling partnership relate to: bringing the family business to a significant growth stage, proving themselves as joint leaders, sharing roles and responsibilities and articulating their common vision.

Ownership at the sibling partnership level also creates a number of challenges within the family, such as: addressing the financial needs of multiple families, sharing leadership among multiple families, inclusion of spouses in leadership roles and key decisions, the emergence of inactive shareholders who own shares but are not working in the business and the development or adaptation of governance structures to reflect the new context in which decisions are made in the family, business and ownership sub-systems, as well as in the family enterprise system as a whole.

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In summary, the sibling partnership must devote attention and care to developing processes for sharing control and power among brothers and sisters, and for addressing inevitable conflicts or tensions among multiple families, in order to grow the business(es) and to protect and nurture the family assets, brand(s) and reputation.

Learn about other stages:

Back to the Different Types of Owners of the Family Business.

© Business Families Foundation 2016. All rights reserved.

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