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Owners Role In Family Business

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The Owners’ Role in the Family Business There are distinct roles of the owners, the management and the board of directors in family-owned businesses. The family’s interest in any business is the creation of more wealth both for the current and the future generations. Similarly, non-family members in the management and the board of directors strive to keep their jobs and improve their economic well-being. Thus, it is in the interest of all the company governance structures for it to succeed. However, the prosperity of a family company is dependent on a well-organized governance structure that acknowledges the role of the owners, the role of the board of management and the role of the administrative managers. Though, in a family business, the …show more content…

Thus, these values should be cultivated and understood by the management. Therefore, to assure a better family control, the owners should commit to clarifying the values they deem non-negotiable. Accordingly, from the onset, their association with their business will be cemented. The policies of a business entity define its engagement with stakeholders. Hence, the role of the owners in policy development is critical in determining their future levels of governance without micromanaging the day to day affairs. Therefore, the owners should have articulate policies on their levels of control and interaction with the board of directors and management, the management of shares and dividends, the succession plans of the family, the board of management and the management, the confidentiality and conflict of interest policies. In conclusion, the paper has reviewed the importance of the owners’ involvement in the affairs of the company. The paper has highlighted the resources (money and time) invested in family businesses as justification for the owners to be involved in its governance. Further, the paper has stressed on the processes the owners require to maintain a grip on the affairs of their business without micromanaging, which include articulating the vision, values, and setting policy frameworks. Therefore, agenda setting in a family business is a core mandate of the owners as part of their governance

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