Corporate Governance
Typically, governance in family businesses begins informally, with meetings around the dinner table or at Sunday lunch, and with a ‘board on paper’ to satisfy corporate legalities. It is a workable framework of governance, built on a foundation of family ties, trust and loyalty. As the family grows and the business develops, the governance framework also needs to mature.
Both systems involve balancing the interests of the stakeholders, including owners and the Board of Directors.
Here are some questions the family business will need to explore when engaging corporate governance:
- Have we updated our corporate constitutional documents to match our vision for the future?
- How are decisions made in the boardroom?
- How are directors remunerated and held accountable?
- Should we establish committees such as an Audit Committee or Remuneration Committee?
- Should we establish an Advisory Board?
- What policies do we need to include that reflects our vision and lays down clear responsibilities and decision-making powers?
- How do we create the optimum balance between family and non-family directors and between executive and non-executive directors?
