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ePaper created 2015-05-28, 18:34:54 | version 1.33.0
3 Employing the family Employing the family should in many respects be no different from employing those outside the family. The family which fails to approach the employment of “its own” on an “arms’ length” basis could be storing up a number of problems. Examples of flashpoints that can surface include any one or more of the following: • A family member is aggrieved that her child is not employed in the business whilst the children of her siblings are • A family member does not have the necessary experience or qualifications to hold down an executive role in the business • A family member is paid more generously than a non- family employee carrying out the same job • The job titles, job descriptions or reporting lines of two family siblings are unclear or even non-existent, resulting in (a) confusion (b) each sibling stepping on the other’s shoes and (c) a lack of clarity as to how each sibling is performing • Family members are not given proper feedback on how they are performing. For example, a family member assumes he is performing well when, in fact, there are serious concerns which the family are reluctant to convey to him. 4 Succession Much is talked about the importance of succession. Why is it so important? Succession (whether it be ownership or management succession) is at the heart of the survival of a family business and, if handled badly, it may result in: • an owner who has not thought through the implications (financial or otherwise) of his impending retirement • a retiring owner who won’t “let go” or who is seen as “interfering” after his retirement • a successor who quietly does not really want to be the successor • siblings or cousins involved in the business (or their spouses on their behalf) who are aggrieved at not having been chosen to succeed or are unclear as to what a succession plan means for their careers • siblings who are not involved in the business and who resent what they see as “financial unfairness” in terms of what they might expect under their parents’ will. In this context “fairness” does not always mean equality • key employees who become unsettled as a result of a lack of certainty over the future of the business. There can be a lot to think about in terms of succession and leaving everything until the last moment can often plunge the family and the business into disarray The thread that runs through many of these potential flashpoints is often a lack of communication between family members and between the family and stakeholders of the business.