Ian A Marsh familydr JP Morgan Cazenove, London February 1 2008 Cazenove Capital Trustee Conference Avoiding Jarndyce … … managing family conflict Ian A Marsh familydr JP Morgan Cazenove, London February 1 2008
Cazenove Capital Trustee Conference February 1 2008 The challenge 2 out of 5 marriages end in divorce 1 in 4 families fall out over a will 42% of siblings never talk again 20% never talk to their mother again 11% make a will to stop inheritance Less than 24% of family businesses make it to the second generation and less than 10% to the third Cazenove Capital Trustee Conference February 1 2008
Cazenove Capital Trustee Conference February 1 2008 The downside risk For the family Loss of family and fortune For the trustee Loss of clients and opportunity Reputational risk For the professional Loss of clients Cazenove Capital Trustee Conference February 1 2008
Cazenove Capital Trustee Conference February 1 2008 Sources of tension Marriage breakdown Generation gap Digital divide Sibling rivalry First family v second family Family v professional management The vision thing Cazenove Capital Trustee Conference February 1 2008
Cazenove Capital Trustee Conference February 1 2008 Causes of conflict “Most disputes arise from miscommunication, unmet expectation, disappointment and frustration” Carroll and Mackie, The Art of Business Diplomacy Perception is all F includes response of last resort to coercive power Cazenove Capital Trustee Conference February 1 2008
Obstacles to communication Ready, willing … … and able? Listening and hearing Seeing, hearing and moving People, problem and process Gender, religion and culture Strong emotion Loss of trust Cazenove Capital Trustee Conference February 1 2008
Cazenove Capital Trustee Conference February 1 2008 Triggers Any material change, but particularly Death Divorce Managerial succession Proposed sale of the family business Restructurings and reorganisations Cazenove Capital Trustee Conference February 1 2008
What can the family do? Communicate, communicate, communicate Cazenove Capital Trustee Conference February 1 2008
What can the professionals do? Model good behaviour Encourage engagement and dialogue Encourage venting BUT empathise, don’t sympathise Discourage entrenchment Discourage demonisation Encourage early neutral intervention Cazenove Capital Trustee Conference February 1 2008
Cazenove Capital Trustee Conference February 1 2008 Mediation Magic A trained, trusted, neutral lets people speak the unspeakable ends the dialogue of the deaf speaks truth to power to achieve open and honest dialogue Cazenove Capital Trustee Conference February 1 2008
“Peace is not the absence of conflict, but the presence of creative alternatives to conflict – alternatives to passive or aggressive responses, alternatives to violence” Dorothy Thompson
Dialogue is more than a series of monologues