Family businesses can face a series of unique conflicts due to the intersection of family and business relationships. Some actions that should be taken include:
Succession Planning: The transition of leadership from one generation to another can be a complicated process. Choosing a successor, managing expectations, and handling roles can create tensions within the family and the business.
Clearly Define Roles and Responsibilities: Defining roles and responsibilities within the company can be complicated, as boundaries between the family and the professional often blur. Lack of clarity can lead to conflicts over decision-making and authority.
Communication: Lack of effective communication can be a significant problem. Misunderstandings, lack of transparency, and ineffective communication can generate conflicts both within the family and the business.
Equity and Compensation: Clearly defining the equitable distribution of responsibilities and compensation must be well-established to avoid conflict. Family members may feel aggrieved if they perceive unfair treatment compared to other family members working in the business.
Inclusion and Exclusion: Challenges related to the inclusion and exclusion of family members in the management or ownership of the company can lead to significant tensions.
Planning: Proper business planning can avoid conflicts when making important decisions, such as changes in the company, entry of new partners, or the retirement of founders.
Corporate Culture vs. Family Values: Defining family values during the Family Assembly and how they are integrated into the corporate culture helps prevent conflicts. The company may need to adapt to changes in the business environment, which sometimes conflicts with family traditions and values.
Family Assemblies as Conflict Resolution: The Family Assembly is an effective tool for raising and reaching agreements to resolve conflicts and achieve dispute resolution. The Family Assembly will establish guidelines for forming an appropriate Family Governance.
It is important to address these conflicts proactively, establish clear policies and procedures, and seek the advice of professionals to help manage the complexity of a family business.
At Ingenium, we can support you and your family to prevent potential conflicts and create multi-generational continuity.
www.ingeniumdevelopment.com | +1 (786) 372-0042