As Family and Family Businesses develop and grow, personal relationships between Family Members become difficult, more complex and in some cases fragmented. An effective way to build that understanding is through a Family Charter or a Family Constitution.
A Family Constitution, simply put, is a document that outlines how a Family will govern itself. This living and breathing document serves current and future generations by outlining the Vision, Mission, Code of Conduct, Family Business Governance Structure and Framework including Ownership Principles & Structure, Roles and Responsibilities of members, Meetings, Decision Making Matrix and Succession Plans under various forums, Conflict Resolution Mechanism, Family & Business Policies, etc. A constitution is well-worth the time and effort, as it provides necessary guidance to drive effective decisions and constructive interactions.
A Code of Conduct or a Vision or Mission statement alone may not address the governance issue.
Therefore, a Family Constitution with all the features mentioned in the preceding paragraph is essential for smooth running of the Family Business. While creating a Constitution document, as many members of the Family as are available need to be involved and once finalized, it should be ratified by most of the Family Members.
A Constitution is well worth the time and effort as it can provide the guidance to run the Family