Two things are certain: First, maintaining harmony within a family is complex, and second, running a successful business requires considerable effort and self-discipline. Those two aspects come together in family-owned companies and regularly force family members to make challenging decisions: Do we put family unity before business interests? Can we implement business decisions despite possible family conflicts?

1. Creating a balance between family harmony and business challenges requires constant
communication and awareness. However, family governance in the context of business
administration is not straightforward, mainly since business owners focus on day-to-day
operationstoensure growthand success.Theremaybesituations where a familycannegotiate
informallyatthe kitchen table,butbusinessfamiliesusuallyfacefamilyand businesschallenges
that cannot be resolved quickly.
Sometimes the first and second generations live close to each other and share similar ideas.
However, large,multi-generational, and jurisdictionalfamiliesmayrequirespecificstandardson
discussing important business-related topics and how to reach decisions.
That’s when things get complexand may require a structured framework. There are many
stories about families that lost control over their business due to feuds and ongoing conflict.
But how can families account forthe diverse views of their members?Howcan they ensure that
they offerfairopportunities to everyone? How can the balance business and family interests?
Family governance providesclarity about roles,responsibilities, and decision-making. It’s the
framework forcommunication and a tool to manage family members’ expectations that they
may have regarding the business. Astraightforward ruleset enables constructive and efficient
discussions to ensure harmony and business growth even in conflict situations. Accordingto
research, family governance positively affects the business success and family members’
engagement in the business.
Two things are certain: First, maintaining harmony within a family is complex, and
second, running a successful business requires considerable effort and self- discipline.
Those two aspects come together in family-owned companies and regularly force
family members to make challenging decisions: Do we put family unity before business
interests? Can we implement business decisions despite possible family conflicts?
WHAT IS FAMILY
BUSINESS
GOVERNANCE?