We hear a lot about the struggle to achieve a “work life balance” but family businesses have been taking their work home for decades. A 2009 survey carried out by South Yorkshire accountants Hawsons revealed that for 44% of family business discussions take place “when and wherever” and for a further 19% discussions take place “at home”. The Sunday Lunch Board Meeting is a common phenomenon in the family business; however, this can lead to issues of exclusion for directors, managers and owners who are not family members and also resentment from family members who are not involved in the business.
Only 30% of family businesses survive to the second generation because sibling rivalry over contentious issues such as share ownership, succession and salaries all get in the way of forward business planning. As a family business grows and different generations start to join many family businesses take the decision to create a Family Charter (sometimes called family constitutions or protocols). This is a written document which creates a framework to support the formal business structures, and typically sets out how the family wishes the business to be run, the family’s goals and the long-term strategy, the family’s relationships within the business and how the family members should behave towards each other in the context of the business.
The charter can also cover such issues as, who should be employed in the business? Who should be entitled to sit on the board? What happens if someone wants to sell their shares? And should in-laws be entitled to own shares?
Having a Family Charter in place can boost overall staff morale through the knowledge that they are fully supported by the family rather than being treated as outsiders. No two Family Charters will be the same, but the process of working together to create a Family Charter can help the family and the business achieve long term growth objectives.
So where will your family business be at the end of this new decade? Should you be taking stock and seeking professional advice on how to future proof your business?