Many family businesses have suffered for want of clearly defined Code of Conduct. Besides growth in family, business and individualism, disappearance of joint family values, absence of quality mentors for gen next have made family businesses drift away from even commonly accepted Code of Conduct. This is particularly relevant when such codes are not articulated and accepted by all family members.
The Code of conduct is invariably based on Family Values but as these are not consciously inculcated from childhood it becomes a great challenge to enforce the code on Family Members.
The significance of creating a Family and Business Code of Conduct cannot be overemphasized as the following benefits accrue to the family and the business.
A well documented code of conduct should:
- Act as a guideline for ethical decision making
- Act as a reference for solving ethical dilemmas
- Highlight the values which members of an organization or group must uphold
- Prevent discrimination or harassment
- Encourage positive relationships
- Lay down rules regarding giving and receiving gifts
- Avoid actual and potential conflicts of interest
- Enhance the reputation of an organization