Tip of the Week Archive

Among the jobs of the business leadership and the board, in terms of governance, is to determine the roles of everyone in the organization, establish a clear chain of command, create procedures for making important decisions and develop grievance procedures. “Within that framework, the development of crystal clear roles and responsibilities for family leadership is imperative,” adds Rivers. “Job functions need to be coordinated and overlap removed. If you do that, it eliminates opportunities for tension, misunderstandings and, most importantly, the possibility of long-term resentments that can fester and become bigger problems down the road.”

“You need to create standards around who enters the business,” explains Rivers. “Depending on the business and its needs, being a family member may not be enough. Some family businesses require that certain academic or career benchmarks be reached before people join. If you have an engineering firm, for example, does any family member entering the company need to have a supporting or related degree? Or do they need to have career training outside the business before coming in? If they don’t meet these guidelines, are you willing to set up some form of apprentice program so that they can learn on the job?”

In addition to having solid rules around who joins the company and how they do it, Rivers advocates for policies regarding behavior. It may sound odd, but disagreements in the environment of a family business can involve heightened tensions. “You should think about the way you speak with each other. Try not to air business issues that are also family issues in front of employees,” he says. “We tend to police our behavior with family members less than we might with others; it’s based on familiarity and comfort. But that can have a negative impact on non-family employees and the business as a whole.”