Put your family values in writing

Family governance represents a process for making decisions on all manner of family and business issues, using family values as the foundation for such decisions.

Most families have strong beliefs about how their company should be run, but in order for those values to become tools capable of supporting the business, they should be put to paper.

The interrelationship between “hard” issues, like earnings and growth, and “soft” issues, such as values and relationships, in the typical family business is in some ways the company’s greatest asset — and, potentially, also its greatest liability. Having strong core values can create a remarkable industry reputation. However, the specter of intrafamily conflict may make the business less appealing to investors and thus may diminish its value in a sale context. Transitioning family members from managers to owners can address these concerns. Families should make managerial candidates aware of their core values and the systems in place for decision making.