What is the three circle model?

The Three-Circle Model of the Family Business System was developed at Harvard Business School by Renato Tagiuri and John Davis in the 1970s. It soon became, and maintains to be, the central organizing structure for understanding family business systems, used by families, consultants and academicians worldwide.
This framework clarifies, in simple graphic terms, the three interdependent and overlapping groups that comprise the family business system: family, business and ownership. As a result of this overlap, there are seven interest groups present, each with its own legitimate perspectives, goals and dynamics. The long-term success of family business systems depends on the functioning and mutual support of each of these groups.
Each circle has a governance structure and a plan-

• A family council would govern the family and prepare a family plan.
• A management team would lead the business and prepare a management development plan for succession and a business plan.
• A board of directors would govern the owners or shareholders and would be responsible for the strategic plan, continuity plan, contingency plan and the succession plan.