Every business has its unique challenges and problems and family businesses are no exceptions. It may only be aggravated because of the interplay between family and business. A Code of Conduct must be put in place in order to avert or overcome such challenges rampant in the family business scenario.
Challenges that emphasize the need for the Code of Conduct:
Emotions: Family related issues may spill over into the business domain affecting the day to day operations. Family politics will also reflect adversely on non-family employees who may become the scapegoat.
So it is very important that Code of Conduct should have do's and don'ts for Family Members as regards their behaviour in the business domain.
Informality: Family Members are usually informal in the family setting but they must be oriented to formal behaviour in business meetings by means of specific clauses in the Code of Conduct.
Communication problems: Family members must be sensitised about the impact of adopting abrasive communication in meetings as this will inhibit participation from others. The Code of Conduct must stress on protocols to be followed when Family Members communicate with each other.
Conflicts: Family Members must be able to resolve the conflicts by following the guidelines in the Code of Conduct as unresolved issues will affect family relationships as well as future business prospects.