Studies have shown that more and more family enterprises cooperatively develop and set up a family constitution.
The family constitution comprises the supreme model or basic law among the (family) members involved in the family enterprise.
The process of developing the family constitution is equally as important as the end-product itself. A number of different basic principles are stipulated in the family constitution:
- Core family values
- Company goals derived from the family values
- Organization of the family: who belongs to the family (in terms of the family constitution): family council? What decisions does the family council make? How does the family solve conflicts (define the conflict resolution process)? How often does the family council meet? How are new family members adopted into the circle? How often should the rules of the family constitution be reviewed? etc.
- Procedure for amending the family constitution
- Are shareholders/family members allowed to obtain loans from the company? If so, what rules do they need to abide by?
- Principles of the family constitution, details in the shareholders’ agreement
- Transferability of shares
- Joining the supervisory board, organization of the supervisory board, duties relating to the family council, compensation as supervisory board
- Strategic business goals, strategic business orientation
- Rules for the appointment of the management board
- Basic principles and rules for being elected to company management (family, family member by marriage, professional requirements, language skills, etc.): company succession
- Rules/principles regarding the disbursement of dividends
Reference has already been made to the fact that the process of developing the family constitution is just as important as the end-product itself. Or, if the family constitution is not sustained by the members, then it is not very helpful and does not fulfill its task. A family constitution is only sustained if every member can sufficiently identify with it, which in turn requires that the member was able to participate actively in the development of the family constitution.
Because the inclusion of all family members is so essential, it is important that the development process be accompanied by professional assistance.
The process of setting the strategic directions, which are critical for the family, should be accompanied by professional assistance, since it quite often triggers conflicts or emotionally charged discussions. It is therefore advisable to have the development of a family constitution accompanied by moderators, who not only have experience with the legal framework conditions of such agreements, but who also have experience in assisting with difficult discussions (e.g. as mediators).
We look forward to assisting you on this way in a professional and goal-oriented manner.