A major element involved in successful family business governance is ensuring that all family members involved with the business are treated equitably and justly. Doing so lays a stable governance foundation for the business while creating positive outcomes for people involved.
It is crucial for a family business to act justly towards all family members in it - but this does not mean that the members necessarily have to be treated equally. Each family member should receive their dues according to their respective contributions towards the family business.
Contributions towards the business do not only have to be measured by profit or revenue added as well as any other contributions towards the family wealth. Leadership or status on the company’s board, role in key company initiatives, and ability to network and connect the company to important industry figures are among other factors to be taken into account.
Equity and justice must also be upheld with regard to the family business’s succession planning. All those who will someday inherit any element of the family business ought to receive a portion commensurate with their status, be they active or inactive heirs.
Additionally, to facilitate equitable treatment in the area of asset management, family business owners ought to clearly separate all assets into business and non-business assets to maximize wealth preservation. They should also ensure that inactive and active owners will not be able to have shared control of the family business at any point.
Evoque Advisory’s family office advisory services include the creation of plans and methods which ensure equity and justice throughout your family business to put it and everyone associated with it in the best possible position for both today and the future - thus elevating your family legacy through the business.
Please contact us at enquiry@evoqueadvisory.com to request a consultation or address any other relevant matter.
