We mustn't forget that family business disputes have no winners

livemint.com:

The last few years have seen a huge amount of dirty linen from Indian family businesses being washed in public. Recent cases in the public domain include the Singhania family dispute, the stand-off between Baba Kalyani and Sugandha Hiremath, the Finolex group tangle, tension within the Hinduja family, and the now-settled Murugappa family differences.

There are several major casualties of such disputes. Relationships weaken, there are socially adverse implications, and the stress presumably takes a toll on the health of disputants, all of which can have an impact on a business and its stakeholders—such as public shareholders, lenders and management team members.

The causes: Such disputes have various causes, including lack of cultural alignment, greed, ego (even cussedness) and several other factors. Additionally, very often, the next generation’s entry (and the consequential shared leadership) is a trigger, as also situations where economic interests are not aligned with value creation.

In many cases, the induction of external expertise and a lack of clear communication escalates solvable issues into a crisis. The ‘harder’ causes of disputes include ‘muddied’ holding structures, such as those featuring intricate cross-holdings, Hindu Undivided Family (HUF) holdings of shares, shareholding structures that are not in sync with intended holdings, shares held via several entities, and of course, a missing shareholder agreement and/or family charter.

And when disputes arise …: The question that arises when a dispute surfaces is what should be done, given the consequences of leaving conflicts unresolved for an extended amount of time. Since arbitration (and/or litigation) is a relationship destroyer and often a value destroyer