Bringing in new blood can refresh a company. But what if that person happens to be the spouse of one of the enterprising family members?
Some argue that spouses can make good employees because of their vested interest and inherent familiarity with the business. Others want to keep spouses away, saying their employment can create intense, irreparable conflicts that can damage the business and the family unit itself.
Some families, in turn, allow spouses to participate in greater family meetings regarding the business, though they can’t actually work there.
How involved should a spouse or significant other be, and what are the risks?
Among the pros of integrating a spouse or significant other are that they might have valuable business experience to offer. In addition, their participation can make them feel more like a full and contributing member of the family. They can also become ambassadors for the business, as they have a stake in its success.
The cons, however, are many:
- Spouses might not have the skills needed, and their participation could negatively affect the bottom line.
- Employment of significant others can cause tensions among other members of the family.
- The morale of non-family employees might suffer because of perceived favourtism and unfair performance management.
- Those who married into the family and later got divorced could cause operational disruption and even reduce the value of the business, depending on whether the couple had a marriage contract.
A family’s rules regarding participation of spouses could be written or unwritten, says Michael Louie, a partner at D&H Group LLP in Vancouver. “There are some very successful Canadian families who said, ‘No family in the business, period.’”
But when it comes to business, there is nuance, says Daphne McGuffin, the Guelph, Ont.-based founder of D3 Learning Solutions and a family advisor. She sees little difference between bringing in an outsider and hiring an insider related via partnership or marriage.
“You’re running a business and you need a new bookkeeper, a new CFO, or whatever it may be. How would you go about filling that position?” She points out that even if you’re married to someone, it wouldn’t make sense to hire them if they didn’t have the right qualifications.
Gayla DeHart, a doctor of psychology and family enterprise advisor in Vancouver, points out that spouses can contribute in many ways, offering leadership, emotional and technical intelligence, communications skills or a stabilizing presence during times of transition.
“Often, it’s the combination of professional skills and soft skills that makes their contribution particularly valuable,” she says.
Then again, qualified spouses may not be interested in working in the business, says Louie. This is because some organizations have historically underpaid family members—no matter their role—because of other perks. “[This is] because, indirectly, the kids are owners. I know CEOs of organizations being paid $75,000.”
Fostering cohesion
Experts say family members should start talking about these issues early, ideally before the second generation begins partnering up.
“If you’re running a family business and you want the family cohesion to be there, [establish] a formality around what your principles and policies are regarding having family members participate,” McGuffin says. This should include spouses and extended family, she adds.
Louie points to the three-circle model of family business. Introduced in the 1980s by John A. Davis and Renato Tagiuri, it reflects how the family, business and ownership are interdependent, and how a decision in one circle can affect the others. Louie says that families may not be familiar with the model, so their roles and perspectives can be confused when it comes to situations such as spouses working in the company.
A thoughtful family governance structure is important in such cases, Louie says.
“How much say will this person have if they’re in a position of authority? Will their recommendations fall on deaf ears, and mom and dad have the final say on all things, and this person’s authority is effectively cut off at the knees?” Or will the process be more democratic?
Spouses with no formal role
If your spouse doesn’t have a formal role in the business, but its operation is discussed at the dinner table, a useful starting point is to ask a few practical questions about the role and presence of the spouse during those business conversations, DeHart says. “Does the spouse hear about family business matters at the dinner table? Do they care about what’s happening in the business? Do they have something to gain or lose based on its outcomes?”
If business matters are discussed at home, then the spouse is likely engaged, and he or she might face personal or financial implications.
“They will have a voice whether or not they are formally included. The real question is whether you want that voice to be informed,” DeHart says. “Uninformed voices tend to fill in the blanks, often with assumptions and incomplete or inaccurate information, which can create unnecessary tension.”
Spouses in a paid role
If you decide to hire a spouse, that person should be just as qualified as an outsider applying for the job, McGuffin says. That means vetting him or her for the skills and experience that would be expected of someone from outside.
If the spouse does not have those skills, determine whether he or she has demonstrated the capacity, capability and commitment to grow into and excel in the role. Fundamentally, the standard should be the role, not the relationship.
Louie says that this is where governance can help, by formalizing best practices regarding family employment. To whom should the spouse report? Perhaps it would be better to report to a board or a non-family member, rather than a member of the family.
Another area to establish best practices is with documentation, such as an employment contract. If the person doesn’t remain married, or their performance is insufficient or inadequate, legal documents rather than informal non-written agreements should be in place, Louie says. By treating the working relationship of the spouse within the company like a normal employment relationship—which you would do with any VP or president—the spouse has recourse as well, and the family has confidentiality.
DeHart says a divorce should not automatically affect the spouse’s role. Instead, that person should be evaluated based on performance, just like anyone else, unless there is a documented performance issue.
Renée Sylvestre-Williams has written for Canadian Family Offices for three years. She is a Toronto-based journalist and content strategist with more than 15 years covering personal finance, insurance, taxes and investment. She has written for the Toronto Star, the Globe and Mail, WealthSimple, MoneySense and The Walrus. She is a COPA winner, editor of The Budgette (a newsletter focused on finance for solo earners), and the author of the book The Singles Tax (January 2026).
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