Managing a Family Business


  • Employ family members only if they are qualified for the job, have relevant experience with an outside business and want to work in the family business.
  • Discuss and define expectations of family member as an employee.
  • Clearly define employment conditions in writing. e.g. wages and benefits, working conditions, code of ethics and behaviour
  • Don’t hire a family member if you can’t or won’t fire them. Have a clear written policy for hiring and firing.
  • Decide and distribute job responsibilities according strengths and interests, not what family member employee would like to do in the business. Undertake profiling such as eDISC to determine best possible fit within the organisation.
  • Do not engage in nepotism and favoritism. Achievements and rewards should be based on merit, not membership.
  • Shed family roles at work. i.e. father and son are not father and son in the work place.
  • Challenges and/or conflicts in personal relationships will emerge in a family business if not managed.
  • Know your family members, i.e. the strengths, areas of existing and potential conflict.
  • Recognise other’s behavioural traits and learn how to manage them accordingly.

Hiring a Non-Family Executive to Manage the Family Business

  • Qualifications, skills and experience are essential, however a strong fit with the family business culture is also important. Someone who knows or has an association with the family business is preferable.
  • Be sure the non-family executive has the same vision for the future of the company as you as owner does.
  • Providing an attractive remuneration package is important, however keep financial and voting control where applicable, within the family.

The Prospective Non-Family Executive Checklist

  • What assurances are given about career development and long term job security? They need to be contractual.
  • What is the family dynamics & family tree? Which family members work in the business and what are their job roles?
  • How do they feel about a non-family Executive managing the business?
  • How are family members remunerated for the roles they do?
  • What are the actual work ethic expectations (of family members ?) and are they stated in the job description?
  • Which, if any, family members will be reporting to me?
  • Is this a new role?
  • If not why did the last incumbent leave?

Future of the Family Business

  • Prepare a succession plan for your business in its early days. Review it regularly. Discuss it with potential and wiling successors. Provide incentives for potential successor.
  • Make sure other ‘hopefuls’ know what your plans are well in advance of implementing them. Know when it’s time to let go of the reins.
  • Groom the successor by educating them into the business and providing your knowledge, experiences and wisdom.
  • If there is no family member that can or will take over the role, a Non-Family Executive should be sought.


The dynamics of family owned business are more complex than other businesses. Plan well in advance for the effective management of the company, now and into the future.

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