CUHK

Glossary

We have selected some key terms from the family business literature and identified their 'definitions' from two major sources:  Family Firm Institute and Wharton Global Family Alliance.  We provide a Chinese translation to these terms but retain the exact wordings from the sources. 

Board of directors 董事會 – group of individuals elected by shareholders to establish corporate management policies, select top management and make decisions on basic issues (e.g., dividend policies, mergers and acquisitions, sale of the enterprise or major assets; also a traditional mechanism used to transition the enterprise balance point.^

Consultants 顧問 – includes family business consultants and family wealth consultants who tend to have a process focus and help integrate the plans and interactions of the family, ownership and management groups as well as the individuals within each group; typically they no longer practice in their profession of origin.^

Cousin consortium 堂/表兄弟姐妹聯盟 – term used in the development model to refer to the stage where ownership is held by family members from different branches of the family (i.e. cousins); often this is when a family enterprise has transitioned from the 2nd generation to the 3rd generation.^

Equality 平等 – the resources each family member receives through the family business are equal among family members.*

Equity 公平 – the resources each family member receives through the family business depend on their actions, input or performance.*

Family 家庭 – We refer to family as those individuals related by blood, marriage or adoption who have, or will have, a claim to the family business. This definition includes members from multiple generations and multiple branches of the family – whether or not they work in the family business.*

Family assembly 家族理事會 – a forum for all family members dedicated to information sharing and discussion of family related issues such as family business, family life and family wealth management.*

Family business 家族企業 – We refer to family business as a business that is owned or controlled by a group of people related by blood, marriage or adoption. When a family owns or controls several lines of business, we use the term family business more generally, i.e., to refer to the family enterprise.*

Family charter/family constitution 家族憲章/家族憲法 – a document stating the family’s formal rules and regulations.*

Family committees 家族委員會 – groups of family members responsible for various aspects of family life, such as an education committee, family governance committee and/or social committee.*

Family council 家族大會 – a formal group of family members responsible for day-to-day family-related decisions and their implementation.*

Family foundation 家族基金會 – an institution financed by a donation or legacy to aid research, education, the arts, etc. e.g., the Ford Foundation. These are often begun by families that have made money from the family enterprise, e.g., The Rockefeller Brothers Fund.^

Family governance 家族治理/管治 – We refer to family governance as the formal and informal rules and institutions that structure the decision-making processes.*

Family office 家族辦公室 – a separate entity apart from the operating business (and sometimes created with the assets realized after the sale of a family enterprise) consisting of a diversified wealth portfolio held for the benefit of the family.^

Family system 家族系統 – the manner in which family members make decisions and interact.^

Family tree 家譜 – a diagram which illustrates the family’s ancestral origins and connections, starting with the present arrangement of children, parents, grandparents, siblings, cousins, etc., and moves back in time; often used by family enterprise consultants in the form of a “genogram” (see below for definition) to help the client family understand certain patterns and issues that have recurred through several generations.^

Genogram 家系圖 – a diagram often used by family enterprise consultants to help the client family understand certain patterns and issues that have recurred through several generations; the diagram is used to help the client describe a family tree (see definition above) to highlight such patterns and issues.^

Heir apparent 繼承人 – a person whose succession to a leadership position (e.g., next president or CEO) appears certain often by informal designation.^

Parent-offspring partnership 父母子女合作 – term used in the development model to refer to the stage where a controlling owner has transitioned ownership and/or management responsibilities to his/her children.^

Succession planning 傳承計劃 – the process and content of preparing for a successful transition of leadership in a family enterprise, often from one generation to the next.^

Sibling partnership 兄弟姐妹合夥 – term used in the development model to refer to the stage where ownership has passed to a succeeding generation consisting of siblings.^

Systems theory 系統理論 – holistic explanatory model that recognizes that all parts of a system are interdependent and that the actions of one group impacts other groups in the system.^

Three Circle Model 三圓模型 – describes to clients and other professionals the interacting and interdependent roles of family, enterprise, and ownership, with boundaries often unclear as one individual may be part of two or three circles wearing different hats at different times and for different purposes; Taguiri and Davis,1982.^

Transition 過渡 – any major shift in leadership often occurring after death or retirement; can be from one sibling to another but most often refers to the change from one generation to the next in the evolution of a family enterprise.^

Trusted advisor 可依賴的顧問 – has a special personal advisory relationship with the client in which he/she provides a perspective on any topic that the client desires; usually based in one of the main professions of origin but evolved over time into a relationship of trust and confidence in an areas that extend beyond the advisor’s major area. This is the person to whom the client turns for advice regarding major issues and decisions.^

 

References

* Amit, R., & Perl, R. (2012). 2012 Family Governance Report: Sources and Outcomes of Family Conflict. Retrieved from http://wgfa.wharton.upenn.edu/documents/WGFA_2012_Family_Governance_Report_July_12_2012.pdf

^ FFI 2010 Launching Pad / the Essentials materials