WHAT IS A FAMILY CHARTER?
The Family Charter is a facilitated agreement that documents the expectations of the Family. The Charter establishes the business as a definable and important Asset that deserves to have Shareholders treat it with objectivity and respect. It defends Family Members employed in the business from conflict and interference, whilst ensuring they are accountable to the Shareholder Family. The guiding principles are developed and agreed to by the Family Members and defines the Family’s relationship with the Family Business enterprise. The Charter is created through facilitation and is signed by each Family Member to reinforce their contribution to the Charter and secure their agreement to the binding principles and practices.
The Family Charter addresses issues that tend to be the most controversial and most crucial to the future of the Family in Business. For example, a Charter may address issues surrounding; Leadership, Leadership selection, Strategy, Family employment, Dividends, Charitable services and more. The Charter will always evolve over time as transitions and generational impacts occur.
Once facilitation is complete and family consensus is obtained, the Charter represents a clear and agreed statement of values which minimises and in most cases avoids the development of typical conflict confronting Families in Business. In times of conflict or decision making, the Charter can be drawn upon to remind Families of the binding principles and practices agreed upon that should be observed. The Charter also aids family members to understand their rights and responsibilities that come with both ownership and management. This process clarifies the importance of boundaries between family and company.