The "Sibling Agreement": Preventing Conflicts Before They Start

When siblings take over an enterprise, the shift from a single-leader model to a partnership can be jarring. Without clear operational boundaries, childhood rivalries can resurface in executive meetings.

A Sibling Agreement acts as a practical code of conduct for co-leading the business.

Key areas to define include:

•  Areas of Authority: Clearly delineate functional responsibilities (e.g., one sibling oversees Operations, another oversees Finance) to prevent stepping on toes. 

• Deadlock Resolution: Establish a tie-breaking protocol such as consulting an independent board member when consensus cannot be reached.

• Equal vs. Equitable Equity: Separate employment compensation from shareholder distributions so every sibling feels rewarded fairly for their actual workload.

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