Unveiling the reality: The truth behind family constitutions

The establishment of a family council was meant to provide a framework for collective decision-making and enforcement

Crafting a family constitution is often portrayed as a pivotal moment, promising to unite family members under a shared purpose and align values for the enduring success of a family business. However, the harsh reality for many families is a far cry from this idealistic vision. Let’s delve into the sad tales of families who embarked on this journey with optimism, only to encounter disappointment along the way.

Navigating the Pitfalls: Family A’s Journey

“We signed our family constitution more than 10 years ago, but nothing has changed! The policies we all agreed to implement were never enforced. Now that dad is no longer around, it has become quite stressful reminding my siblings to adhere to the rules. Our children have joined, and they are confused and overwhelmed with so many overlaps. We are trying to undo many things, but it is very difficult to impose change amongst us siblings. There is a family council to enforce our agreements, but nothing has materialized. We only learned about the council’s importance during our first meeting. The foreign consultant that facilitated our agreements left us after the signing.”

Family A’s story echoes a familiar sentiment among families grappling with the implementation of their family constitution. What began as a beacon of hope and promise has since devolved into a source of frustration and disillusionment. Despite their earnest intentions, the passage of time has only widened the chasm between their aspirations and reality.

Following the patriarch’s departure, the mantle of enforcing the constitution’s provisions fell upon the shoulders of the siblings. However, the absence of a central authority left them adrift in a sea of confusion and uncertainty. The newer generations, eager to contribute, found themselves grappling with the complexities of overlapping regulations and unclear guidelines.

The establishment of a family council was meant to provide a framework for collective decision-making and enforcement. However, without proper guidance or leadership, the council languished in inertia, failing to fulfill its intended purpose. The departure of the consultant post-signing left the family grappling with a document they struggled to comprehend, let alone implement effectively.

As the years passed, Family A’s once lofty aspirations gave way to a sobering reality. What was meant to be a roadmap for harmonious coexistence and efficient business operations became a testament to unfulfilled promises and missed opportunities. For Family A, the journey toward effective governance and cohesion remains an elusive pursuit, overshadowed by the weight of unmet expectations and unresolved conflicts.

Why family constitutions fail: Unraveling the complexity

Why do so many family constitutions fail to deliver on their promises? Is it the fault of the consultant, or is it the reluctance of family members, particularly the founder or leader, to enforce the rules? Perhaps it’s a combination of factors – a lack of emotional commitment, an emphasis on short-term gains over long-term sustainability, or simply the inherent challenges of navigating complex family dynamics.

In my years of experience, I’ve observed this pattern exacerbated by the non-confrontational nature of many Asian families. Issues that should be addressed head-on are often swept under the rug, leading to simmering tensions and unresolved conflicts within family-owned businesses.

Flawed and unenforceable family constitutions are all too common in Asia, signed with much fanfare but ultimately relegated to the annals of irrelevance. Over time, they become little more than symbolic gestures, overshadowed by the practical realities of day-to-day operations and familial dynamics.

Interested in stories like this? Join us for “The W+B Family Governance Leadership Series: Structure, Culture and Succession” to not only hear more but also learn the tools and strategies to navigate the complexities of family business dynamics with clarity and purpose. Don’t let unresolved conflicts hold your business back—seize this opportunity to secure a lasting legacy. Secure your spot now: https://bit.ly/ GovernanceLeadershipSeries. For inquiries, please contact Christine at wb@wbadvisoryasia.com