Corporate governance in family businesses

CORPORATE governance is now an accepted necessity in all businesses. It helps to ensure that there is accountability to stakeholders and sustainability in the business.

Good corporate governance practices are equally, if not even more, important for family businesses, since the overlap between family life and work life, and the rigidity of the family hierarchy, present challenges that are absent in non-family firms.

For some family firms, the irrational fear of losing control can be the main obstacle to the adoption of improved corporate governance practices. However, good governance principles can be of great help to family firms in dealing with two particular threats to their growth and continuity: internal conflicts and succession.