Managing Family Conflicts of Interest
The essential problem family businesses must deal with is conflict of interest, which arises when people have multiple roles – in the business, as an owner, and as a family member – that can potentially conflict. Thinking about the issues of a family business in this way is a good path to mitigating the challenges they can bring.
Establishing explicit rules is a good start, and this article covers several good ones: only put family members on the payroll if they have an active role in the business, communicate clearly and honestly with employees, separate family decisions and business decisions, and create boundaries between family and business each with their own decision-making process (and group).
This is something I cover in the mini-course “Culture of Acceptance”
Consider This: Does your family have explicit rules regarding how the family business operates and is governed? How do family members view the family business (or family operating assets)? Think back to a recent issue within the family and consider whether or not it relates to a conflict of interest between the multiple roles that family members occupied.
Here is more on reading on family business governance.