When the constitution does not match the kitchen table
Many NZ family firms discover their legal documents describe a company that no longer matches how decisions are really made.
Ask who approves a large equipment purchase and you may hear two answers: the one in the constitution, and the one that happens after Sunday roast. Succession planning fails when advisors only read the first answer.
Map the informal path
Before rewriting documents, interview how last year’s real decisions were made. Who phoned the bank manager? Who could stop a hire with a look? Those habits are the true governance system until something replaces them.
Do not “fix” paper ahead of behaviour
Updating shareholder agreements while the founder still signs every cheque creates a fiction. Align behaviour in stages—authority matrices, meeting cadences—then ask counsel to reflect the new reality in legal form.
Watch for shadow vetoes
Spouses, retired uncles, or trusted managers sometimes hold veto power nobody wrote down. Naming those influences is uncomfortable and necessary. Unnamed vetoes resurface the week a successor tries to change a supplier.
Use advisors in the right order
Bring your solicitor in when options are narrowed, not when the family is still arguing about whether anyone should retire. Counsel drafts poorly when the brief is “make everyone happy.”
Ownership framing sessions exist for this messy middle—see Ownership Transition Counsel if share rights and kitchen-table habits have drifted apart.