The advisory committee is a mechanism established in order to support the family council and the family board during the transition process. It consists of experienced professionals trusted by the company's shareholders. The advisory committee can be consulted prior to adopting critical decisions. Members of the committee should have the qualifications to be able to advise the shareholders and openly discuss their ideas with them. The advisory committee will make significant contributions in the transition process by undertaking roles in important processes such as the determination of appropriate family members to take over the company's management, specification of the qualifications required from family members that will be employed in the company, and mentoring of the younger family members.
In companies where two or more generations work together, more than one core family is included, and a certain level of financial size has been reached, a relatively more structural corporate governance system is needed, comprised of a family council and a formal board of directors instead of the tri-partite mechanism mentioned above.
In the network of relationships becoming increasingly complex with the company's development, the board of directors is the highest authorized body of a company, comprised of persons from both within the family and independent of the family and with no executive position in the company. The board of directors is responsible for observing the interests of both the family as well as other shareholders.
