Family Business Governance

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Our trusted system empowers families to develop a shared vision, clarify ownership, and build harmony - all while preparing the next generation of responsible shareholders.

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What is Family Business Governance?

Family business governance is the set of rules, policies, and processes that guide how a family business is managed and operated. It is the system by which a family-owned business makes decisions, resolves conflicts, and plans for the future.

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By taking into account both the needs of the business and the interests of the family, an effective family business governance framework helps to maintain the family's values and legacy over time.

Purpose of Family Business Governance

Establishing a clear vision and mission

Vision and mission statements provide guidance to family business decision-makers, with both family and business in mind.

Setting operating guidelines

The board of directors provides guidance to management when making decisions to ensure they are in line with the company’s mission and values.

Ensuring fairness

Governance helps to create fairness by setting guidelines on decision-making and who should be involved.

Why Family Businesses Should Prioritize Family Business Governance

As the family business transitions through generations, direct oversight of the business may become less practical. Establishing robust governance systems help ensure that shareholders can rely on the board to maintain family values, monitor business performance, and preserve the underlying value of the company's assets. This also promotes harmony within the family and reduces disputes among shareholders.

How Family Business Governance Works

LeadershipOne's services are designed to help family businesses develop a shared vision, clarify ownership and leadership roles, build family harmony and prepare the next generation. Our coaching and support ensures family business owners have the knowledge and tools to make informed decisions.

Develop vision

Create a shared family vision statement to align the family's values and vision with the company's strategic plan.

Clarify roles

Gain knowledge about ownership, investments, and roles in the family business. Build trust and understanding among family members.

Build harmony

Improve family harmony by promoting open communication and understanding. Foster a positive working environment to ensure family business success.

Common problems with Family Business Governance

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Unclear mission, vision, and/or values

Without a clear mission, vision, and values, family businesses can become mired in disagreement and competing interests, making it difficult to reach consensus on important decisions.

Indecision cause by lack of trust

This may arise due to competing interests, personal biases, and misaligned expectations. Lack of trust can lead to ineffective decision-making and discord, making it difficult to work together as a family.

Undermined family harmony

Many family businesses are reluctant to bring independent voices to their boards, which often results in myopic vision about the business. Independent voices on the board can focus management on results and bring greater accountability. An outside perspective can help challenge the status quo and promote fresh thinking about the business.

Scarce personal growth opportunities

Without the opportunity to explore and discover individual ambitions, family members may have difficulty reaching their full professional potential.

How to implement Family Business Governance effectively

Establish goals and objectives

Create a mission statement that outlines the core values of the business and set clear, measurable goals for growth, both short-term and long-term.

Define family and management roles

Assign specific roles to key family members within the organization and clearly define their respective duties and responsibilities.

Develop trust through collaboration

Foster an environment of trust between family members by emphasizing communication, collaboration, accountability and mutual respect.

Conduct regular assessments

Assessing the board’s effectiveness is essential, and objectivity is key. To ensure meaningful assessments, bring in independent and trusted advisors to facilitate the process.

Are you a family business leader looking to expand and perpetuate your family's legacy?

Each of our strategy consultants bring 20+ years of experience in working with family businesses to help you address the key issues you face in preparing your family business to continue to the next generation.

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