Writing is easy, not living: Challenges in implementing family business constitutions

economictimes.indiatimes.com:

constitution for the family business has gained popularity, with many wishfully viewing it as a cure-all for their current and future challenges. While creating a constitution is essential, families should understand it merely marks the initial phase in fostering a cohesive family business. In reality, numerous families face difficulties in actualizing the principles outlined in the document into practical, everyday reality. We discuss here the key challenges encountered in implementing a family business constitution.
Concept of Family Business Constitution (FBC): There are fundamental differences in the two systems of family and business, necessitating clarity across various levels to ensure the enduring strength of the combined entity. Serving as a guiding document, the FBC is instrumental in preserving harmony, values, wealth, and the long-term sustainability of the family business. It establishes a foundational framework governing diverse aspects of family dynamics and their interplay with business operations, encompassing pivotal areas such as decision-making processes, roles and responsibilities of family members, and mechanisms for conflict resolution spanning multiple generations. While many families opt for a written constitution for its clarity and specificity, an unwritten constitution relies on shared understandings and traditions transmitted across generations.

Empower Your Corporate Journey with Strategic Skill Courses

The Implementation Conundrum: Despite recognizing the importance of a FBC, many families struggle with