Ownership Behaviours

Ownership of a family business inevitably leads to the involvement of the owners in the business, one way or another.

While some family businesses flourish with the involvement of the owners, some may not and thus leave the owners with a question mark about which ownership behaviour that would be appropriate for the family business.

A number of ownership behaviours like Active Governance, Providing Resource, Ownership Duties and Professionalism have an impact on family business, some positive while others may be negative or neutral.

While few owners actively participate in the day to day management of the business, some would provide resource - both financial and non-financial to the business, while others may fulfil all the ownership duties like providing capital, attending meetings, review annual reports, provide inputs on investment strategy, succession planning etc.

All these ownership initiatives or involvement may not have a significant impact on the performance of family business as most of these are  a given while most family business don't require a great deal by way of financial resources from owners.

The one Ownership role which has maximum positive impact on the business is professionalizing the Family Business. That simply means that the family business has developed clear roles and responsibilities and a healthy level of accountability. So there is no interference outside their areas of responsibilities.

Even in western markets that boast of a developed capital market, a large number of companies are formed by sole proprietors and operated by families. However, to ensure organisational success and entrepreneurial growth, it is essential to have a professional management system."

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