Developing Family Policy Family Business Code of Conduct

Family Business Code of Conduct

What is Family Policy Development?

Policy Development means to have a set of rules, which are agreed upon and are to be followed by the family in arising sensitive situations, so that the issues can be handled with ease.

The rules are needed for enable quick decision-making for the business growth.

Family Business Policies address the following challenges, which can arise at any stage of the business cycle:

While building and developing the Board of Directors, the following questions should get answered:

Which family members can join the business?
How can family members become eligible to join the business?
What is the career path for a family member in the business?
Who guides and evaluates the family members in the business?
What are the compensation criteria of the family members in and out of the business?
How do we manage family members who are not able to perform?
What are the roles of owners in family business decision-making?
How can family align to decisions?
How do we resolve disagreements and status quo?
Who all can serve on the board of directors?
What is the tenure of the board of directors?
What are the roles of the board of directors?
What financial information can be disclosed to directors / non-directors, owners / non-owners? At what frequency?
What is the role of spouses in family business decision-making?
What is the importance of philanthropy to the business and the family?
Who is the decision maker for philanthropic work?
Who can be owners / shareholders?
How and when can the stocks be purchased, transferred or sold?

Benefits of Family Business Policies

The answers to these unexpected and challenging questions, if framed, agreed upon and documented well in advance can keep the family aligned and the business free from the hurdles of indecisiveness. Family Business policies are much more than a documented process and family decisions. The creation, documentation and adherence to these family business policies, shields the family from the internal conflicts, strained relationships, and helps the business move on at the desired pace. y family members and the shareholders about the business performance and the decisions taken thereof