Often for these kinds of businesses, the roles of family members, shareholders, and members of management overlap. This leads to a lack of clear boundaries and structures defining the relationships between stakeholders, which can lead to conflicts that affect the well-being of the family and the company.
Establishing and formalizing structures and governance processes that regulate these relationships is essential for the strength and durability of these businesses.
*Family Business in Transition: Data and Analysis Part 1 (of 3). Family Business Institute, 2007.