Chapter 7
Governance, Advisors, and Boards
To understand the complexities of family business, it is important to understand its governance and systems. There are three basic forms of family business governance: the controlling owner, the sibling partnership, and the cousin consortium. The latter is usually characterized by members of at least three generations.1 As the business matures and progresses through the stages of the business life cycle, more family stakeholders become involved. With the three subsystems in mind (owners, managers, and family members), it is easy to understand the differences between family members who are in different subsystems. For instance, a family member who is an owner but not an employee may be more inclined ...
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