Family Governance in the UK and Around the World
18th April 2021
Dr Claudia Astrachan and Dr Isabel Botero
The IFB Research Foundation has commissioned a major new research project to explore family governance and share best practice from family firms in the UK and around the world. The research on best practices in family governance seeks to identify the most effective ways used to align and unify, engage and manage the family ownership group.
What is family governance, and why does it matter?
It is a widely shared belief that good business governance is of central importance for the continuity of the family enterprise. This agreement is firmly rooted in decades of anecdotal evidence and empirical research, both of which effectively highlight that adhering to governance standards supports companies in meeting their regulatory and legal requirements while fostering a culture that thrives on transparency and accountability, and stable and productive relationships with all constituencies.
Many multigenerational family enterprises come to realize that ensuring transparency and accountability on the business side does not suffice: As the shareholder group grows in size and complexity over time, efforts need to be made to foster cohesion and unity, facilitate alignment, and effectively manage the family-business-interface. These mechanisms regarding the making, monitoring and adjudicating of the rules for family members’ internal and external interactions are commonly referred to as ‘family governance’.
Despite the need for guidance and rigorous, evidence based advice on how to best govern the family behind the business, research on family governance remains severely limited. What is more, the little research there fails to appreciate the heterogeneity of business owning families, and the way in which this diversity affects the way in which these families adopt and respond to governance mechanisms on the family side.
What is the objective of our research, and how can you help?
Our research seeks to (1) shed light on the formal and informal governance practices that multigenerational business families in the UK and around the world rely on to manage themselves as well as their interactions with the business. We aim to (2) identify the drivers and inhibitors of establishing and using family governance mechanisms and the (3) best practices to leverage the process of developing family governance mechanisms to assure family member commitment and psychological ownership.
If you are interested in learning more about how to effectively manage your growing family, as well as the intersection between your family and your business, please support our research by filling in the short, anonymous survey here: https://lnkd.in/eRCw9rs.
For those families with a keen interest and experience in family governance, kindly consider collaboration with the research team for a case study for the final report. If you would like to learn more, please reach out to Isabel Botero at any time.