Family Business Governance - Overview
Governance within family owned businesses refers to the oversight and decision making process that has been implemented in the business. Proper governance is essential to ensure that decision-making is done efficiently and effectively.
Governance is uniquely difficult within a family business. Due to the nature of the business, family members may take on roles within management, ownership, or both. Additionally, family businesses often employ non-family members in key management roles. The result is there are many competing points of view as to how the business should be managed. As such, the governance structure must account for these various points of view and long term goals.
Family business governance involves the contribution of three main systems:
The most successful family businesses have a clear vision for these three groups of stakeholders. You will read about how businesses typically organize themselves within these three areas.