Dispute resolution process
The purpose of a dispute resolution process (DRP) is to provide family members (active and non-active) with a forum to discuss and resolve conflict related to the family business. The nature of family business is such that family issues will impact the business and business issues will impact the family. Family conflict left unattended will negatively impact relationships, which in turn will negatively impact the business. Therefore, to promote harmony within the business and the family, a process to deal effectively with conflict is recommended.
Sibling code of conduct
Many families in business will implement a code of conduct outlining desired behaviours for siblings or cousins. This can include how to address one another in the workplace, how meetings will be handled amongst family members, and how issues will be dealt with. Having a formal code of conduct can help all family members behave in a manner that promotes and supports the family’s business and personal values.
Turning the tide
Each of the items discussed in this series plays an important part in helping family businesses to not only survive, but also thrive from one generation to the next. Successfully transitioning to the next generation requires not only the technical exercise (e.g. wills, tax planning, valuations), but also consideration of nontechnical aspects (getting the whole family to endorse a plan based on principles and rules that support their beliefs, values, and culture). Most families in business only have the technical aspect completed, which is the main reason negative family business statistics exist. If family businesses and their trusted advisors, such as lawyers and accountants, start placing as much emphasis on the family component as they do on the technical, there is no doubt we will see the statistics improve in the future.
Danielle Walsh is founder of Walsh Family Business Advisory Services, a consulting company specializing in helping family-owned and operated businesses navigate the rough waters of management and ownership succession. She is a certified public accountant (CPA), chartered accountant (CA), and holds certificates in family business advising and family wealth advising from the Family Firm Institute (FFI). Walsh is also president of the Ottawa chapter of the Family Enterprise Exchange. She developed her philosophy and desire to help family businesses from her father, Grant Walsh, who has worked as a family business practitioner for the last 25 years. Walsh also currently teaches the first family business course offered at the undergraduate level at Carleton University in Ottawa. She can be reached via e-mail at danielle@walshfbas.com.
