When it comes to family businesses, it is not uncommon to find situations in which the personal and professional sides overlap, directly interfering with business management. The implementation of corporate governance instruments is one of the most important actions to solve potential impacts generated by this confusion. In order to carry on this process in a healthy way, organization and commitment on behalf of partners, founders, board members and family members are required. Furthermore, the professionalized application of good governance practices in the organizational environment is required as well.
The first step is to know how to differentiate between personal and company assets, formalizing clear rules regarding the use of goods and services. In this way, potential conflicts arising from the lack of agreement among the board members are avoided, coordinating the relations in a direct and transparent way.
It is also necessary to develop a joint strategic planning, with the contribution of partners, successors and other members of the family business administration, so that everyone can be assigned a part of involvement in the elaboration of this material. At the same time, it is important to have specialized legal advice to follow up tax matters, corporate and equity issues, in a more technical and exempt form.
With regard to the financial part, it is recommended not to use money from the company’s cash for personal expenses. Each family member must have a position and salary stipulated in a contractual manner and in accordance with good corporate governance practices.
In addition, it should be assessed whether family members hold positions equivalent to their respective professional competencies. Improvements, trainings and updates should be constantly encouraged among all employees, regardless of whether they are top management family members or not. In cases of promotion or recruitment, the purpose is to take into account the merits of each and keep family relationships out in these situations.
Therefore, to be successful at the head of business, the separation of the personal/family from the professional relationship is indispensable. The sooner the professionalization of the family business begins, the smaller are the internal conflicts and the greater are the opportunities to commit the company to good governance practices and prepared to place its space in the market.