FAMILY DOMINATED COMPANIES In family companies, it is often the case that:
● family members have special voting rights
● family members have guaranteed seats on the board.
This can lead to both positive and negative governance issues. Positive ● with the family name at stake, there is likely to be a greater feeling of "ownership" on the Board, which may reduce the risk of unethical behaviour
● to continue the family name, a longer term view of management may occur. Negative ● a less independent board
● the board may have a dominant person / group of family members
● with board members often coming from a single family, there may be a lack of variety in ideas, and an unwillingness to change previous decisions
● family problems may become business problems
● there may be unsuitable people on the board, who were elected purely because of their membership of the family.
● family members have special voting rights
● family members have guaranteed seats on the board.
This can lead to both positive and negative governance issues. Positive ● with the family name at stake, there is likely to be a greater feeling of "ownership" on the Board, which may reduce the risk of unethical behaviour
● to continue the family name, a longer term view of management may occur. Negative ● a less independent board
● the board may have a dominant person / group of family members
● with board members often coming from a single family, there may be a lack of variety in ideas, and an unwillingness to change previous decisions
● family problems may become business problems
● there may be unsuitable people on the board, who were elected purely because of their membership of the family.
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