The number one step to avoiding conflict—and a family breakdown—in a family business is creating governance structures and policies to guide decision-making. They provide a clear conflict resolution process when tensions arise. But what specific structures should a family business implement?
The best place to start is with a family constitution. This document formalizes the family’s vision for the business, ensuring all members are aligned on common goals. It also defines family members’ roles in the business and establishes decision-making processes. Ultimately, a family constitution sets clear expectations and formalizes processes.
Once your family business establishes the family constitution, there are five additional governance structures to consider. Read about them here—as well as best practices to effectively implement these structures in your family business.
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