Family Constitution
A Family Constitution is a very flexible document that can be used to record the overall governance of a complex family enterprise, or be limited to a particular part, for example the Family Assembly or Decisions reserved for owners. At its fullest, following the FBS Consulting Framework, the Constitution for a family enterprise contains the following.
Section 1: Our Shared Purpose
- Our Mission, Values and Vision for our Family Enterprise
Section 2: Ownership Governance
- The role of owners
- Return on investment / dividend policy
- Transferring ownership /capital liquidity
- Decisions reserved for owners (including how these are made)
- Owners’ Assembly
Section 3: Family Governance
- The role of family members
- Family Assembly and Family Council
- Family Office (managing the “business of the family”)
- Family policies (e.g. employment and remuneration of family members; education of next generation)
Section 4: Corporate Governance
- Role of the board
- Composition of the board
- Selecting and appraising board members
- Non-executive directors
- Communicating/reporting with the Owners Assembly/Family Assembly
- Incentives
- Decisions reserved for the board
- Board committees
Section 5: Miscellaneous
- Conflict of interest
- Confidentiality
