THERE are two commonly cited findings about family businesses that highlight the pitfalls and potential of such businesses. First, most family businesses have a short life span beyond the founder's stage and it has been estimated that 95 per cent of family businesses do not survive the third generation of ownership. Second, family businesses (those that do survive) tend to outperform non-family businesses. In other words, they either die young or they thrive.

Family businesses need to pay attention to both family governance and business governance issues in order to survive and thrive. As a business founded by a family evolves, it will face different governance challenges that pose both opportunities for its continued growth and threats that may cause its demise.

In this article, I will discuss the key corporate governance challenges faced by the following types of businesses: