Issue No. 65 - June/July 2012
How to avoid a family business feud
Family Business Australia has developed a checklist of steps to guide family businesses through the difficult territory of mixing business and personal lives.
FBA Chief Executive, Philippa Taylor says with family businesses making up 70% of the total, including major corporates handling popular brands, it’s not surprising that sometimes things can go spectacularly wrong.
Philippa says the key to avoiding a bitter family feud is to ensure the family business has clear governance practices, similar to a publicly listed company.
“There have been several high profile cases of feuds in family businesses recently, which may have been avoided if plans and policies existed from the outset,” she says.
“Quite often simply going through the process of having the discussions and setting up corporate governance policies will be enough to avoid a family feud in the future. It’s an important step to help get all the family members on the same page.”
Family Business Australia offers 10 tips for running a successful family business and maintaining positive family relationships.
1. Appoint one or more independent non-executive Director to the Board of Directors. Independent nonexecutives bring outside experience and perspectives to the board, and can fill skill gaps in the family.
2. Establish a Family Council for the business-owning family. This is a separate governance body which meets to focus on family expectations of the business. It is to the family what the independent board of directors is to the business.
3. Create a family charter. Also known as a code of conduct, or constitution, the family charter outlines what is, and is not appropriate practice for family members working in the business.
4. Set position descriptions and key performance indicators for all members of staff, including family members. Setting clear roles, responsibilities and measures for each family member will help avoid dispu...