What can be done to manage these relationships so that you avoid drama and arrive at the best decisions for your family and the business?
According to the Family Business Survey conducted in 2021, only 28 per cent of all businesses have a Family Charter (or constitution). So why should this number be higher?
(Outside) Help Wanted!
We can all agree that family business meetings are often more difficult to navigate due to the emotions involved. An outside adviser is essential for cutting through the emotions and focusing on definitive outcomes. The right adviser can facilitate discussions constructively by tackling the tough topics, clearing any misunderstandings, and keeping the family focused on the objectives, avoiding highly emotional business decisions.
An adviser can also provide a layer of independence as they are not emotionally involved, and serve in holding the family accountable, which significantly aids in dealing with more sensitive matters. In turn, this ensures an equitable and sustainable solution for the business.
Prevention is better than cure
An extremely effective method to keep the family on track and abiding to their values is through some type of formal governance document such as a Family Charter.
This document is developed in consultation and consensus with all family members, to identify the family’s value and policies. It also provides an opportunity for your family group to consider and discuss upfront sensitive matters that have the potential to create disharmony.
Discussing these matters provides an opportunity for the family to become more aligned so when emotions rise in future meetings your family can refer to the Charter – and their experience in creating it – to get back on track.
Philip Hammon, Director of Hammons Holdings, a mutigenerational family business, tells Family Business Australia:
"Creating our Family Constitution allowed the family to agree on policies relating to the business. We could also decide on how our family values should be reflected in our operations, so if business conditions changed we knew we could stay strong together.”
How we can help your family business
Each Grant Thornton office across Australia has their own resident team member who is an accredited Family Business Australia Adviser. This accreditation sets our advisers apart as specialists in family business with a focus on family communication, family consulting and governance.
Come and speak to our team today.
