The importance of family businesses to the global economy is undeniable. According to the European Commission, they account for more than 60% of all companies in Europe and the Americas and about 50% of employment. But for many, succession planning can be a cause of anxiety, and there are many misconceptions around what is involved.
Family charters make sense for family businesses, in particular for those controlled by the second or later generations. But what exactly is a family charter, and what advantages can it bring?
I have seen a growing trend in many Middle East businesses to develop proper rules on how to govern the relationships between family members in their respective roles as shareholders, board members and employees. This awareness of the rules has greatly improved, and more families are becoming cognizant of the challenges they might face and how they can deal with them.