Cousin Consortium

What is a Cousin Consortium?

A cousin consortium is, in essence, a stage within a family business. Through succession, an entrepreneur/controlling owner passes down the enterprise to his or her children (sibling partnership), who in turn, hand the reins to the third generation. In this stage, it is typically several cousins who are responsible for the management and operations of the business and/or hold company shares.

Successful well-known cousin consortiums that have prospered through at least three generations include Cargill, Lego and Michelin.

Issues Unique to a Cousin Consortium

A few of the unique issues that accompany the process of succession in a family business are:

  • Transfer of power/ownership through generations
  • Interpersonal relationships
  • Influence within the family

Other cousin consortium challenges include:

  • Inequitable balance of authority
  • Difficulty in managing disputes
  • Ineffective governance structures - outside support from board of directors is often a necessity

Effective succession planning is vital to the health of this type of organization. Since interest in the business is typically earned through inheritance, shares may become diluted through generations. Furthermore, individuals may possess varying degrees of skill, motivation, work ethic, commitment to the company, etc.

Find Resources and Support for Your Cousin Consortium at ABFI

The Alberta Business Family Institute recognizes the unique dynamics of relationships within a cousin consortium. We provide a number of seminars and programs that can enrich your experience as an owner, manager or employee within this complex structure.

Explore this website to learn more about the tools, resources and advice waiting for you at ABFI. Contact us today with specific questions related to your family business.