A Family Business Without Rules? Conflict Is Only a Matter of Time

A family business can operate for decades without clearly defined rules. However, all it takes is the founder’s unexpected departure, a dispute among siblings, or the commingling of personal and business assets, and long-standing trust can quickly turn into conflict.

In the 46th episode of Highgate Talks, Tomáš Demo, CEO of Highgate Group, speaks with Erika Matwij, founder of the Family Business Institute and an expert on family business.

The discussion focuses on three areas that significantly affect the stability of family businesses: dependence on the founder, the absence of pre-agreed rules, and the blurred line between family and business assets.

In this podcast, you’ll learn:

• Why does tying a company to its founder reduce its value and complicate its sale,
• What the “red folder” should contain and how it can help in the event of an unexpected incident,
• Why trust within a family is no substitute for clear rules,
• What is the difference between a family constitution and legally binding agreements,
• how to prepare for the next generation to join the family business,
• What conflicts arise when personal and business assets are commingled,
• Why rules need to be put in place before a crisis arises.

Rules aren’t made by weak families. They’re especially needed by families who want to stay strong even in difficult situations.