Family conflicts are inevitable. If families can anticipate issues and create clear guidelines for dealing with them — guidelines that everyone supports — they increase the odds of avoiding the family trauma, drama and pain of the conflicts.
Family constitutions are instruments of governance. They define rights and obligations and provide criteria and procedures for making important decisions. They set up the playing field for orderly succession and establish mechanisms to help resolve conflicts before they have damaging effects on the business and on family relationships.
Some predictable clashes that a family constitution can help to address are:
- Who will get what job? Is competence the criteria for selection?
- Who will receive what benefits from the family assets?
- Who will have control of the business? How is control exercised?
- How can I separate myself from the business and still be a family member?
- What am I entitled to as a shareholder who doesn’t work in the business?
- How much can I take from the “family pocket” before others complain it is too much, more than my share?
Does Your Family Business Need Help?
Family Business Matters has extensive experience assisting family businesses. With many decades of experience, we understand the wide variety of challenges that families face as they work together to build, grow and sustain a thriving family business generation after generation. Through conferences, continuing education programs, family business retreats, speaking engagements and private family business consulting services, Family Business Matters has assisted more than 450 family-owned businesses around the world chart their way through family business issues of all shapes and sizes.
For more information on how Family Business Matters can help your family business survive and thrive, please contact us today at (970) 948-5077.