What kind of governance system works for the family in the business? Governance system can be seen as way families communicate their ideas in the business. Dunn AND Magilo’s article on family business governance, explains that the nature of governance in a family enterprise can take different forms depending on the size of the business. Business governance can appear in a form of family assembly, family council, family advisory board and board of directors. This way working members in the families can talk about the operations in the family business, a good succession plan, needs/ expectations, new strategic business operation and their rights as workers in the firm.
The implementation of governance in a family firm is good for the structure and sustainability of the family firm but sometimes they come with certain challenges that affect the firm in the long run. One of the core challenges are relations between shareholders who are non-family members and family members in the firm; sometimes in the long run, they both may not share the same vision and this results in a conflict of interest. Another challenge is that when working family members lack professionalism at the firm, it is really hard for governance to be implemented in crucial part of the business.
source:https://www.linkedin.com/pulse/family-businesses-need-good-board-governance-marla-saggu