Governance in Deloitte Private
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By Lizzie Hill, Partner, Deloitte
Family businesses are different, and their differences from other forms of enterprise, particularly around the issue of governance, need to be understood and accommodated, especially by chairs. Typically there is a much greater degree of emotion at play in a family enterprise and that emotion is, almost by definition, closer to the surface. While directors of PLCs and private equity houses are often dispassionate, family members feel an attachment to the business that runs deep, and this attachment extends across place, brand, product and purpose.
Many family businesses wrestle with matters of ownership and control – how should the family shareholders control, or influence the running of the business? How do you manage relationships between family members in the context of the business? How can family members ensure appropriate access to information on the business without “interfering” with day to day management?
This week, Peter Pagonis, a senior partner who leads Deloitte’s Family & Individual Wealth practice in Australia, discusses the benefits of introducing a family council governance structure.
We often hear about how having a family council can be hugely important for family owned businesses. They seemingly bridge the gap between family and business, and in the best cases, manage to simultaneously meet the needs of both.
This week, Yasmine Omari, a Manager with the Deloitte Middle East Family Enterprise Consulting team in Dubai, explores the importance of creating a family constitution.
When one discusses constitutional legacy, political connotations are often the first thoughts that spring to mind. Family business systems are not too dissimilar to political systems, be it autocracies or democracies. Successful family businesses tend to have certain key features that make them successful, such as clarity of purpose and values shared by their members. They adhere to an established code of conduct, and are aware of stakeholder expectations, undertaking activities accordingly. Such features are not dissimilar to successful political parties that are driven by a set of ideologies, meeting the needs of the people.
This week, Walid Chiniara, a partner who leads the Family Enterprise Consulting practice in Deloitte in the Middle East, explores the benefits of implementing a family governance system.
Avoiding the illusion of a family charter: celebrate conflict and engage in a process of growth as a family
This week, Prof. Dr. Alain Laurent Verbeke, a partner in Greenille by Laga, discusses the role conflict has to play in family dynamics.
Whether directly or indirectly, the involvement of spouses in some aspect of family enterprise is almost always inevitable. Unfortunately however, their involvement can create difficult issues if not considered carefully. We see that having pre-agreed family protocols in place on the topic of the role of spouses and partners can help minimise the potential pitfalls of their involvement.
This week, Yasmine Omari, a Manager with the Deloitte Middle East Family Enterprise Consulting team in Dubai, discusses structure and ambiguity in the family business system.
There’s often a perception that a lack of formal structures or processes in a family business is indicative of a lack of professionalism. Many advisors are thinking “Can you believe they don’t even …” as they set out an array of services intended to ‘professionalise’ the business.
The majority of ‘enterprises’ (encompassing businesses, other investments and philanthropic ventures) around the world are family owned and controlled, and yet despite the clear appeal of the family enterprise model, not every family and enterprise work well together. Sayings such as ‘clogs to clogs in three generations’ have arisen from the prevalence of families that manage to destroy their enterprise over time, and I’ve seen countless families fight over their assets and demonstrate how a shared economic interest can really put family relations under pressure.