One of the particularly tough topics to broach in any family business is family employment: Should you hire that aunt, uncle, or cousin just because they are family? If you don’t have clear parameters in place defining the terms under which family members can be hired, you might find yourself in a very awkward situation, which is why clearly defining this can become a very valuable aspect of your family governance.
A great example of family governance when it comes to family employment can be found in a handbook on Family Business written by the International Finance Corporation in 2011. In it, they call out the case study of the Saad and Bistany families, who founded SABIS – a global education network that has an active presence in 20 countries on five continents.
With two families involved, the need to set expectations regarding family employment with the company was clear. In 2006, the SABIS Family Council approved a family employment policy that included not only guidelines on hiring, firing, and educational requirements, but also stated the company’s clear philosophy on hiring relations: “A job at SABIS is neither a birthright nor an obligation for family members. Once hired, family members will be treated as all other non-family employees.” It goes on to state that, “In line with our employment philosophy, the company should not be considered a ‘shelter for family members in search of a job…’”
Our family subscribes to clear family employment guidelines that speak to how we are able to help bring new family members smoothly and clearly into the company fold. My siblings and I all went through training either outside first or dived into the corporations associated with our family business, which put us in a “corporation mind-set” that we were able to carry into the corporate structure of our family business. But just because we had this training didn’t mean that we were afforded any special status. (Well, maybe we were, but at least not to the degree that we saw with the younger generation in other family businesses.) We were expected to earn our places based on merit by learning and proving ourselves along the way. And even if one of us ever needed to step out of the business, that was also factored in as part of the planning we did for our family governance.
Bottom line: adhere to a well-thought-out family governance plan and let those expectations and boundaries guide your decisions. Learn more about establishing successful family governance by visiting, https://ramezbaassiri.com/.