Few family businesses can grow and thrive without a Code of Conduct in place while other businesses may break down. It is therefore very important for a Family to develop a Code of Conduct document to improve the overall health of the family business.
The Code of Conduct is a written document that articulates expectations of how Family Members will behave inside and outside of the business. A well laid out Code of Conduct can address issues such as:
- Conflict Management
- Information sharing
Tips for writing a Code of Conduct
- Use simple, clear language that all Family Members can understand
- Use examples of acceptable and unacceptable behaviour to clarify points
- Get professional help in creating the document
Before starting the process of laying down a Code of Conduct the following questions must be resolved:
- What is the goal of the Code of Conduct?
- Who are the champions’ of the Code?
- Who is the Code of Conduct for?
- What are the objectives?
- Who all will be involved in developing, administering and maintaining the Code?
- What is the standard process for developing the Code?
- How are violations handled?
- What is the accountability for breaking down the code of conduct?
- Is the content and tone of the Code appropriate for the organization?
- How does the Code reflect the organization’s mission, vision, values and culture?
- How does an organization’s Code contribute to its long-term sustainability?
- How has the organization determined its actual ethical risks?
- How does the Code apply to operations?
- What information should the founder receive?
- How would the Code be introduced and explained such that the related people are adequately educated?
- What procedures are in place regarding advice, issue resolution, or waivers of the Code’s application?
- How is criticism of the Code handled?
- What is the process for the periodic review and revision of the Code? How is compliance with the Code measured and monitored?
- What measures does management take to confirm commitment to the Code?
- What additional steps can members take to satisfy themselves as to the implementation of the Code?