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Governance in Family Owned Companies
Entrepreneurship is one of the most significant factors in
business development. However as the family owned companies
grow, sustainability becomes a great challenge. Companies face
the risk of having scarcity of eligible family members.
Consequently, another change which growth can bring is an
increase in the proportion of non-family to family members. This
means sharing of powers and it requires more formal systems.
They either have to establish good governance systems or loose
their competitive advantage and disappear. Corporate Governance
and Sustainability Center helps family-owned companies;
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To set the right management strategies and good governance practices
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Identify the right growth strategy and help in
benchmarking
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To organize the relations between the family and the company
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To prepare the family charter
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To resort to creative financing without assuming more debt
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To prevent agency cost and asymmetric information
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Set up the risk management and internal control systems
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Family
owned companies can be trapped by their past success. Sharing
information, which is
power, is a
step which families may be
reluctant to take.
Early
strategies may be
so deeply rooted that a change in mindset
can be
extremely, difficult to achieve.
Family
companies should
understand and
accept the fact that
having professional advisers or
consultants is not of the same importance
and
effectiveness as independent board members.
Consultants
are only committed to the tasks they
have undertaken and
their commitment is limited with the duration
of the
task |
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Corporate
