one in which "one or more members of one
or more families have a signifi cant ownership
interest in, and commitment to, the business."
That means control of at least 20 percent of
products, good management and good planning, there
is one golden rule, according to Philippa Taylor, CEO
of Family Business Australia. "A good family business is
one in which family issues and business issues are clear-
ly separated." That means a board of directors to make
decisions about the business, set strategy and oversee
the management of the enterprise. And a family council,
separate to the board, to deal with issues that affect the
family more than the business.
good relationship. "Dysfunctional family systems will be
exaggerated if you are working together as well," Harris
says. "If your family deals with confrontation by aggres-
sion, things will become even more aggressive when that
confrontation involves business as well as personal mat-
ters." Margaret Porritt, founder and owner of Feathers
Boutique, employs her son and daughter-in-law, and im-
plemented independent advisors early in the piece to help
mediate. "We have always had in place fi nancial controllers
to offer an outside perspective with the business' best in-
terest in mind. It's important to have experts without the
passionate emotions that can occur in the decision-making
process within family," Porritt says.
needed and that your qualifi cations will equip you for the
role you intend to fi ll. Have a clear understanding of your
job description and understand your KPIs and to whom
you will be accountable." Most importantly, she says,
spend at least two years outside the family business this
will give you experience of working for a boss other than a
relative, and will increase your skills coming into the busi-
ness. "Part of our family agreement is that we must spend
four years working outside of the business before working
for Brown Brothers," says Angela Brown, third generation
winemaker. "Our parents encouraged us to do other things
they never assumed that we would go into the wine busi-
ness but in the end we all came back."
afford to pay you a market related sum, document this for
future discussion." Jimmy Possum's Margot Spalding goes
one further: "Family members must be paid, correctly and
fairly. Otherwise you're going to foster resentment."
exit, Taylor says. "While all parties are still enthusiastic
and optimism is high, work out the `what if' scenario," she
advises. What if ill-health strikes or perhaps your partner
has been offered a great job in China? What if the parties
just cannot see eye to eye? How will anyone be rewarded
for the time they have put in, or the capital they invested?
Consider what each member's expectations might be in a
range of business scenarios such as acquisition by an-
other business, marriage or partnership splits, ownership