The aim of a family charter is to define relations between the company and the family. It sets out the aims, vision and values of the business, and broadly defines the way it operates.
Such a document is essential if the business is to remain stable and continue trading down through several generations. The charter is designed to develop as the years pass to reflect current and future changes.
It is similar to a shareholders’ agreement, and should be written while the company business is in its infancy. Rapid, efficient conflict resolution procedures should be included so that such issues are avoided.
The family charter will also cover how young family members are to be trained and family employees managed, how the business will be passed on to the next generation and what dividends will be paid, as well as how the family is organised (council, meetings, etc.).