In the commercial world, everyone is aware of Corporate Governance. This is mandatory for corporates that fall in certain sectors and there are stringent laws and prescribed norms laid down, which have to be followed. Corporate governance leads to more accountability for the Directors, CFO, and independent Directors, etc. This ensures long term health of the company and ensures the best interests of all stakeholders which include the minor shareholders too.

Most family-owned businesses and small and medium level enterprises fail – not because there is no potential in the business/activity they are into, but due to the lack of a long-term vision and proper Business Governance. For sustenance, long-term growth it is important that the business is to be run under proper governance. The success and continuity of these business houses depend on the management and leadership effectiveness of those at the top, hence there should be a clear demarcation of the owner and the management. Hence most organizations have independent directors who have no vested interest in the business and therefore will monitor the business and bring in accountability and transparency.

Family governance is the third governance as family businesses are uniquely complex enterprises that will have a mix of family members and professionals for governance. Interaction, communication, frequent business meetings, conflict resolutions are important factors that come under family governance. It is important to involve all family members, even those who are not directly involved in the business, as their opinions would also matter, and if consulted, can avoid hassles later.

Conflict resolution is very important, as small misunderstandings and bickering arising in family circles are common, and should be addressed immediately and not allowed to progress to unwanted fights. The focus should remain on business growth only and there should be no communication gap between any family member involved in the different business verticals. Due importance has to be given to the younger generation too and their opinions have to be taken into consideration. A family council will be present in many family-run businesses and they provide the groundwork or strategy on which the business is built and is thriving.