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Structure of a Family Constitution

Families need a “government” that sets up structures to regulate family dealings and ensure each family member receives predictable and fair treatment. The family constitution expresses the will of the family for future generations and gives family members a sense of security about how matters will be handled, including a method or process for resolution of differences.

The basic structure of a constitution is as follows:

Mission and purpose – Lays out the ground rules of “who you are”
Values, standards and expectations
Family Council operating principles – The council is a forum for improving family communication and educating members about general business matters. It is NOT the place for making operating decisions about the business because it includes family members who are not in operating positions. Families may discuss matters of mutual concern but must assiduously avoid getting into specific business matters. Rules are developed in the council for how the family will operate.
Family and business agreements – These define the boundary between family and business, and as much as possible, build a foundation for avoiding conflicts between the two entities. There is the “business of the business,” and the “business of the family,” and care must be taken not to confuse the two.

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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.