Family-run businesses

Good communication can prevent misunderstandings and disputes in family businesses. Without it, the risks include that:

• family members assume they know what other family members feel or want
• personal ties prevent honest opinions being expressed
• the head of the family may take control of the business, even if they lack skills
• one family member could end up dominating the business
• family-member shareholders who aren't active in the business may not understand the goals of those who are, and vice versa
• personal resentments become business resentments, and vice versa
• non-family board or management members feel excluded

Five tips to improve communication 

To support open, honest discussions, where all family members feel safe voicing their concerns, consider these tips:

1. Separate personal and business issues

   Hold all meetings in a work, not home, environment. This will remove personal issues from business discussions.

2. Encourage constructive feedback

   Create ways to give constructive feedback. This can help prevent non-family staff from feeling demotivated and uninvolved.

3. Organise away days

   Hold occasional away days to discuss the business strategy and direction without daily distractions.

4. Implement impartial supervision

   Appoint a non-executive director or create an advisory board. They can provide an impartial view and help keep emotions from clouding business decisions.

5. Create a family constitution

   Develop a family constitution creating policies that will guide the family's relationship with the business.