A father starts a company with a friend, maybe even a few friends. It does well, grows, prospers, and is there for future generations.
The father dies in suspicious circumstances, his shares in the company – for tax and other reasons – go into a trust and the trustee is a business partner who is also a close family friend.
Sometimes the beneficiary works in the business, sometimes the beneficiary only wants an income stream, sometimes the beneficiary strains at the bit to run the company he or she grew up with, sometimes the beneficiary runs away to Bhutan to train as a Ninja.
Or so comic books and movies would have it. This is the theme and prime plot mechanism behind Iron Man and Batman Begins. Tony Stark and Bruce Wayne were both children of remarkably successful businessmen. Both die fairly young with the companies, Wayne Enterprises and Stark Industries, going into trust.
Tony Stark is old enough to become involved in his father’s business right away, but he is really much more interested in jet-setting around the globe and living the life of a trust fund playboy. He has no worries, his father’s friend and partner, Obadiah Stane, runs Stark Industries while becoming Tony’s mentor, when he’s around. Jeff Bridges plays him scarily well in the original Ironman.
Bruce Wayne, on the other hand, was a kid when his mother and father were murdered. His father’s friend and business partner, William Earle, runs Wayne Enterprises with a kind of paternal benevolence that most people would find suspect even if Rutger Hauer hadn’t played him in Batman Begins.
You know the rest, Obadiah Stane and William Earle have very, very different ideas for the direction of Stark Industries and Wayne Enterprises than either of the heirs. Both Tony Stark and Bruce Wayne are driven by a heightened sense of justice, both adapt – by entirely different means – their famous alter-egos, Ironman and Batman. Both eventually discover that the men entrusted with protecting their birthrights have betrayed them and their fathers’ legacies.
We know that Batman and Ironman solved their trust problems rather spectacularly and without the use of attorneys. It’s great, fun, drama. So much fun that it’s easy to overlook the underlying truth. Good drama relies on tension and tension is inherent when a business interest is managed by … someone else.
The potential for a conflict of interest is rife. From the fairly simple: salaries, fees, day-to-day decision-making like hiring and firing; to the more complex: expanding, contracting, merging, acquiring; to the really sticky: investing in development, branching out into a new field, taking risks, the goals of the heirs and the trustees/managers/partners may be vastly different.
The thing here is simply this: a business managed by a trustee is a lot different than stocks, bonds, bank accounts, real estate, mutual funds managed by a trustee. Those things are pretty much static, inert. Businesses are anything but static. They have a million moving parts. There are hundreds of ways they can flourish and many more where they can fold – as any business owner will tell you.
Then there’s the matter of vision. Everyone who has a proprietary interest in a business has a vision of the direction they’d like to see the business take. Successful businesses have owners who share a vision.
The death of an owner and the sudden interest of a beneficiary changes the dynamic – for good or bad. Everyone, I think, would agree that Tony Stark’s vision for Stark Industries was a lot better for humanity than Obadiah Stane’s.
This adds to the complexity of the situation and it adds to the potential for conflict. After all, Tony Stark and Bruce Wayne are crystal clear that their overriding concern is their fathers’ legacies. It’s that concern that leads them to discover what’s really going on with the businesses.
The only way around the myriad of potential conflicts and problems in such a scenario is communication. Open, total communication. This means more than talking and texting – it means open books, open discussions about business decisions, open everything . . . even if the beneficiary is working in the business.