Charter could help avoid family business tensions, says expert

Family businesses in the Sheffield region should have a written charter to help avoid potential problems, a specialist in the sector said this week.

Richard Frost, from Sheffield-based chartered accountants and business advisers Hawsons fears that too few companies have taken the trouble to draw one up, even though they are powerful aids to running a family-owned enterprise.

In the Sheffield area, some 75 per cent of all businesses in the private sector are family owned or run and they employ about half of the entire workforce.

Richard Frost said: “As shares in family businesses pass down to subsequent generations there may be less involvement by some family members and they may not understand the history and legacy of the company. With wider family ownership it becomes more important to involve the whole family so that issues such as their vision for the business, its values and their involvement in it can be clarified.

“The charter can be an important part of the governance structure, setting out the principles the family agree should apply to the business and encouraging family members to engage in, and provide constructive guidance for, the family and the company.

”The process is a way of helping to avoid some of the problems and tensions that can affect a family-owned firm.”

For more information, contact Richard on raf@hawsons.co.uk.