A Brief About the Importance of Family Governance, Heritage, and Succession Planning

 

The resilience of businesses is increased across generations by family governance, heritage, and succession planning. Although family businesses are more likely to endure than other types of enterprises, notable cases demonstrate that stability is not a given and must be developed.




Family heritage

 

The first step is evaluating the family's history before delving into the intricacies of a family business. What values does the family uphold? What values exist? Why is the family cohesive?

 

The family patriarchs frequently omit this stage. They might believe that family history speaks for itself and that present and future generations will be able to uphold it. Examples like the Lacoste family prove them wrong. 

 

Family governance

 

Family governance is the foundation for coordination and communication and can be defined by a comprehensive structure of the family background. Family governance should capture more than rules affecting the family company.

 

Although there are academic models of family governance, we think a practical approach yields the best outcomes. Once values and heritage are clear, writing the family purpose statement might be the initial step.

 

Succession Planning

There may not be anything more irritating for aspiring future leaders in a family business than not knowing their options for professional development.

 

For family members working in the family business, there must be a clear structure and set of rules on career opportunities, the selection procedure, expectations, compensation, and retirement. Once more, this is a work in progress, and the family will likely add more details as time goes on. The conversation should also address outside management and future family business departures. Focusing on uncomfortable subjects will make the family more supportive and united.

 

 

 

Planning for succession is a collective vision for the future of the family business, not just a legal exercise. Read more to know each of its benefits and follow the link below.

 

Read the blog:- https://www.centrolaw.ch/en/insights/detail/why-family-governance-heritage-and-succession-planning-matter

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