While the constitution will not prevent conflict entirely, it provides guidance and mechanisms as to how conflict can be most efficiently resolved.
These results confirm that intensive discussions in an environment viewed as safe, leads to a high degree of trust, openness, and attachment. As a rule: the higher the number of shareholders, the more important a family constitution becomes.
Yet while such topics sound straightforward, issues such as how much compensation family members are entitled to can quickly become a focus of dispute.
It is important that when the time comes to draft the constitution the family has a clear idea of the goals of the business, the roles of the family members and the internal structures of the family business.
Some may be involved through a well-functioning flow of information or others through being able to contribute in foundations or family days.
What are the long term goals of each member of the family? The process for resolving disputes between the family members which concern the business.
Over the years, David has shared his insights and expertise on numerous occasions that have proven to be invaluable. A family constitution should be reviewed and adjusted regularly, after all shareholder structures and economic conditions can change.
How is executive performance measured — what are the benchmarks?
Everyone might not get exactly what they want, but it will definitely make business sense and be as fair as fair can be.
Quite fascinating, actually.