The Importance of Family and Business Governance

Abstract

Corporate governance has gained tremendous attention in recent years, While the process is greatly discussed, it is not always well understood, especially in family businesses, Family business governance is a system of processes and structures put in place at the highest level of the business, family, and ownership to make the best possible decisions regarding the direction of the business and assurance of accountability and control In a well-developed family business, this involves understanding how the business and its governance structure — the board of directors and the management’s executive committee — interact with the family and its structures (the family council, shareholders’ committee, and so on; see Figure 4.1) This chapter explores the respective roles of these structures, their composition, and their function.