When the founder of the business relinquishes day-to-day control and the organisation transitions across generations. Likewise when a business reaches a size and complexity unsuited to more informal management styles, the time has come to consider a more effective governance structure.
When it comes to management and ownership of a business, the responsible thing to do is develop and endorse a number of management and ownership guiding principles, or rules, to help direct and guide the behaviour of family members in their day-to-day business activities.
This can give everyone a better understanding of what is expected of them so that they can make informed decisions about their individual and collective roles in the future management and ownership of the family business.
Watch Thierry Mulliez speak on Family Rules in the video below: