CHAINS THAT LIBERATE: GOVERNANCE OF FAMILY FIRMS

Author Rajesh Jain ISBN 9781403928696 Imprint Macmillan Publishers India Copyright 2005 Trim Size 5.5''x8.5'' Binding Hardback List Price Rs. 295.00 Language English

Governance is considered the most important factor for the survival of a family firm. Although governance is about discipline and accountability and is often uncomfortable, it is the only way to long-term survival. This book discusses in detail the benefits of governance of family firms in an exhaustive manner. It is written keeping in mind the Indian business scenario. Each family business is unique in its size, composition, nature of business and industry, stage of growth, number and nature of generations involved, degree of professionalism, etc. There cannot be a 'one-size-fit-all' solution for all situations. Yet, this book covers ideas that are highly effective in most of the situations and can be easily applied with minor modifications. Chains That Liberate is useful for business owners, management consultants, senior executives, academicians, students, business analysts, bankers and financial institutions and anybody who is interested in the field of family business.

Content

• Preface
• Acknowledgements
• Introduction
• Family Businesses: What They Are?
• Survival of Family Firms
• Understanding the Complexity
• Governance of Family Businesses
• Governance Structures, Processes and Tools
• Family Governance
• Ownership Governance
• Business Governance
• Family Business Leadership
• The Board of Directors
• Conclusion

THOUGH economic status persists, as Unequal Chancesargues, there seems to be high attrition in family businesses. Rajesh Jain writes in Chains that Liberate, from Macmillan (www.macmillanindia.com) that less than 10 per cent of these inherited firms last beyond the third generation. Globally, 80-90 per cent of all businesses are family-owned businesses (FOBs), and they contribute 60-70 per cent of GDP.

"Given the complexity and paradox of family business environment, how is that some firms manage to survive beyond centuries?" asks Jain, and answers that their secrets are awareness, adaptability, and intimacy. "Family businesses are under threat from both the sides, family as well as business," writes Jain, matter-of-factly. Haven't we seen that happening more than once?

A chapter on 'understanding the complexity' informs how, in the joint family system, women members wield much influence. "They cannot handle the situation of unequal rewards to their spouses due to another level of competition prevailing amongst them."

Towards the end of the book is a valuable compilation of 22 'best practices' for FOBs. "Establish mechanism to provoke the firm out of comfort zone," reads the first. Other valuable tips speak about the need for independent directors, separation of the role of chairman from that of the CEO, regular family council meetings for continuity of the practice, documenting policies, evaluation process for entry and promotion, allowing youngsters to work for a few years outside the family business, developing a succession plan, and never telling the youngsters 'It's all yours'.

Let your family be a source of strength, not of weakness, exhorts Jain. "Manage the family as keenly as you manage your business."

Suggested 'family' reading for the weekend!