Family Business

Topics: Management, Corporate governance, Corporation Pages: 3 (474 words) Published: August 6, 2014
Family council

A family council is a governance body that focuses on
family matters, frequently developing family participation policies, and dealing with liquidity issues and estate planning

family council benefits are
-promote communication
-provide a safe harbor for the resolution of family conflicts -support the education next generation family members about family dynamic and ownership issues

Boundaries

The family council and board of directors are separate division. Therefore, two of them still relate to each other

At annual shareholders’ meeting, the board of directors is elected by the family. Family members exercise their responsibilities as shareholders and are informed of company performance, returns on shareholders’ equity, and dividends to be distributed.

Board of directors

Board of directors is a legal entity

Board of directors can come from family and non-family employee

The requirements of a director based on:
his / her reputation
competence
willingness to serve on the board
highly qualified candidate

To be a board of directors, the employee should come through the Management- top management – CEO – and broad directors

The primary responsibilities of a board of directors include :

Reviewing the financial status term
Set the company strategy
Looking out for shareholders ’ interest
Ensuring the ethical management of the business
Being a respectful critic of management
Reviewing CEO performance
Advising the CEO
Bring fresh perspective issues
Assisting on the succession and continuity process

FAMILY CONSTITUTION

Definition

The Family constitution is a statement of the principles that outline the family commitment to core values, vision, and mission of the business that shareholders will follow in their relations with each other, other family members, and company managers.

Components

The content of family constitutions is different depend on the size of the...
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