Olden Days
Earlier this year,the British press featured the very public split in the Pathak family,which pitted mother and brother against daughters and sisters,over shares in their successful Indian food business in UK, with the case ending up in High Court. How did the conflict come to this sorry end? And how,many families ask, can we prevent our business and ownership quarrels enriching lawyers and accountant while impoverishing ourselves? While many conflicts in family business have their roots in clashes of personality,strategy and leadership,disagreements over financial shares are all too frequent.
Here we outline a structured approach not only to averting conflicts in the first place but when they do occur, to minimising their impact and, importantly their financial and emotional cost.
:First principles:
Our experience has shown that to stay together as a close family group and to manage business interests as an integrated and cohesive unit,successful families do two key things. First, they define,and then commit to, an agreed vision of what they want to achieve as a family.
The vision tends to be clearly documented,and sets out not only the means by which the family goals are to be attained,but it also lays down some clear standards of measurement. For example, during the transfer of control and ownership,in the end there are but three choces: break up the business, sell the business or continue the business.