Developing solid governance is a key component of family business success but finding the right balance is key. Read my latest article which looks at how to go about building a structure that is genuinely appropriate to your family business’ size and stage.
“For family businesses, informality can be both a strength and a weakness. An informal approach often lies at the heart of their special culture and atmosphere, helping to streamline decision making and keep the firm ahead of the competition. But when it comes to the owning family’s relationship with their business, informality can become a liability.
Lack of communication among family members – especially unspoken assumptions, understandings and expectations – have spelled the death-knell of many family companies, undermining shared purpose and leading to conflict, unhappiness and business failure. When things like this go wrong, family members tend to blame each other, but usually it’s structural issues, not personalities, that lie behind the problems. And this highlights the key benefit of family governance – that formalising communication provides a structural framework for family stability and cohesion, helping families to manage their relationships and expectations. A system like this replaces complexity with simplicity, not the other way round!”