The Importance of Family Business Policy Making

Posted on May 29, 2015


Spokesperson Entrepreneur - PR2

By : Cahyo Eko Putranto, S.Pd., MM.

Policies governing the relationship between the family and the business are important to any family business. What is more important, however, is the process family members engage in when they create policies.

Developing policies requires that family members communicate with one another about difficult issues. It means letting go of past conflicts and hearing each other out respectfully in the here and now, as well as exhibiting a willingness to search for creative solutions and compromises.

Needless to say, many families know the process is complex and demanding, and that’s why they put off developing policies they need. But the families that plunge ahead reap the rewards and benefits provided by having policies in place and going through the process of creating them.

Here are some benefits of policy making in family business:

  1. The policies themselves help families solve current and future problems.
  2. Policies help avoid problems and conflicts before they happen. They eliminate or reduce future tension.
  3. Families who go through the policy-setting process actually affect expectations and therefore, moderate and possibly eliminate some of the prickly issues that typically arise in family business.
  4. The policy – setting process strengthens and unifies the family.
  5. Policies make things explicit.
  6. Family members become more educated on many levels.
  7. The family business continuity-planning process is enhanced.


Aronoff, Craig E., Astrachan, Joseph H and Ward, John L. (2011). Developing Family Business Policies: Your Guide to the Future. Macmillan Published Limited: England