A family business charter or code of conduct, can be the key to successful family dynamics and business endeavors. Many families in business don’t know where to start or don’t understand the purpose of having a charter.
A family business charter outlines your family’s values, rules of behavior, and communication guidelines. This will not only promote harmony within your family business but also ensure sustained success across generations.
The steps below are a simple guide to creating this important document.
1. Gather the family and discuss your values and goals
Take the time to bring together all the members of your family who are involved in the business. This is an opportunity for an open and honest conversation about what truly matters to your family. Discuss and define your core values and goals as they relate to your business. Embrace the diversity of perspectives within the family and work towards a consensus that reflects your shared vision.
2. Behaviours and communication styles matter
Now that you have a clear picture of your values and goals, it’s time to talk about the behaviors and communication styles that will help you achieve them. In family businesses, emotions can run high, and conflicts can arise. It’s important to establish guidelines that foster understanding, respect, and effective communication. Consider how you can cultivate a supportive and collaborative environment where everyone’s voices are heard.
3. Draft the charter
Using the insights from your family discussion, it’s time to draft your family business charter. This document will serve as a compass, providing guidance for your actions and decisions within the business. Incorporate the agreed-upon values, behaviors, and communication guidelines into this charter. Keep it concise, but make sure it captures the essence of your family’s aspirations and commitments.
4. Review, adjust, and enhance
Once you have a draft of your charter, gather all family members involved in the business for a comprehensive review. Take the time to listen to everyone’s feedback and perspectives. This is an opportunity to make any necessary adjustments or additions. Remember, this is a collective effort, and each family member’s input is valuable in shaping this important document.
5. Publish and share the charter
With the charter refined and finalised, it’s time to publish it as a formal document. Distribute copies to all family members involved in the business, ensuring that everyone has easy access to it. Encourage family members to refer to the charter when navigating challenging situations. It will provide a framework for decision-making and promote unity and alignment within your business.
6. Regularly re-evaluate and improve
Even the most thoughtfully crafted charter can benefit from periodic evaluation. Schedule a family discussion at least every two years to assess the effectiveness of your code of conduct and identify areas for improvement. This enables you to stay adaptable and keep it aligned with the evolving needs and dynamics of your family and business.
By creating and regularly reviewing your charter, you are fostering an environment where trust, connection, and proactive collaboration can thrive. May this document serve as a constant reminder of the shared values that bind your family together and guide your business towards a prosperous future.
About the Author: John Broons is a globally awarded family business expert. One of only three people in Australia to hold the coveted title of Fellow of Family Firm Institute (Boston, USA), John has dedicated his working career to answering the question: how do I guide and support families in business to a place where they’re thriving? Find out more by visiting his website here
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