Maintaining the balance in a family business

A family business is more than just commercial institution. In fact, it is an endless balancing of family expectations/demands and the needs of the business.

A fragile balance between two extremes:

On the one hand there is the family, which promotes values of honesty, sacrifice and quality, as well as respect, loyalty and passion for the business. This helps family businesses to be more resistant to economic crises. However, the complexity of familial relationships can be dangerous. When conflicts and emotions within the family nucleus transfer into the business arena, operational and strategic blockages can occur.

On the other hand, the business need a certain rationality for decision making and the intelligent selection of competencies so they do not get caught up in a tradition that could restrict their capacity for innovation. But the domination of capital and the illusion of infinite economic growth can pervert businesses. They can lose their sense of social responsibility, along with their commitment to the project and long-term planning.

This balance can be achieved through a board of directors who are capable of serving as a mediator between the family and the business. The board of directors is not a tool that is reserved exclusively for big companies. It can be adapted to the needs of every type of company, both at every stage of its development and through every generational change.

Wafa Khlif, professor of Management Accounting at TBS Barcelona

Original text published in the Dirigentes magazine.

MSc Finance at TBS Barcelona:

Many students who decide to study MSc Finance at TBS Barcelona do so because they want to grow their family business.

The MSc Finance from TBS Barcelona provides the option to specialise in Corporate Finance or in Management Control and Governance.

For a year, the students broaden their knowledge of financial analysis through practical classes; upon completion, they put this theory into practice during a mandatory six-month internship.

For more information please visit the MSc Finance page on the TBS Barcelona website

Tags: board of directors|corporate governance|family business|finance|MSc Finance