The Family Constitution / Charter & governance in family busine

Dr. Jean-Philippe Chetcuti | 28 Apr 2011

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Family charters are increasingly seen as effective element in the governance structure of any family business. Jean-Philippe Chetcuti explains more...
 
What is a Family Charter or Constitution?
Global consensus amongst the leading family business experts confirms the role of a family charter as an expression of a family’s vision for the family and its business, its core values, policies and guidelines that govern the family relationship with the business – as employees, owners and family members (Davis 2002).   Family charters have been described as “instruments of governance” (Jaffe et al 1998) and constitute “the written, explicit set of guiding principles that provide family members with a sense of identity and mission that transcends their rights as owners and their roles in the business” (Tucker 2003). Essentially, the family charter fits into the family business governance toolkit alongside legally binding agreements such as the shareholders agreement and the business plan.

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