Watch and research this current case that highlights key questions around family business governance and accountability. What lessons are there to learn for family businesses' governance, in terms of increased external demands from regulators like the SEC and increased demands for oversight. What might it suggest for the competences and capacities demanded of a family business's advisory ?
There have been many cases in corporate history where family businesses were involved in illegal or unethical practices due to the lack of accountability. Due to these reasons, SEC and other authorities have been demanding high transparency and oversight on the family business operations. The owners of the family business must comply with these rules and ensure that all their employees are professional and have integrity. They must be accountable for their operations. The advisory of these businesses is also responsible to make sure that all decisions of the company are ethical and legal.
Although most family members have been well-governed and adequately funded, they are now pressurized to be more responsive and accountable and to ethically keep their governance transparent to the authorities. This means that the family businesses will be keeping their financing strategies visible and therefore, will reduce the debt inflow into the company. This is also important for the advisory of the business to ensure transparency so that the operations are according to the rules of the SEC. If a family business becomes accountable, it will be easier for investors to evaluate their risks.