Contact: Craig Holland
Deloitte
Partner - Tax Services
+61 (0) 3 9208 7586

Contact: Jane Kneebone
Deloitte
Media & Communications
+61 (0) 3 9208 7389

The dynamics in family businesses need to be properly managed as they have the potential to elevate family harmony and the legacy to new heights or, if ignored, to unravel the business according to Deloitte Tax Partner, Craig Holland in his sixth part series on Succession Planning.

“Communication between key stakeholders can be addressed through the use of formalised governance structures which separate the business of the family from the business of the business,” Mr Holland said.

“An outside board of directors or board of advisors can help to optimise company profits whilst maintaining family harmony as they make recommendations on what they believe represents the best interests of the shareholders and the company.

“Outside directors/advisors also play an important role in the implementation of a management-succession plan and can serve as mentors for successor candidates, help them deal with their concerns and make valuable suggestions for their development.

“The interaction between family issues and business decisions can be also smoother by the creation of a unique family governance structure as well.

"This is a family council and serves as a board of directors for the family by protecting growth, development and welfare of all the members of the family."

Mr Holland said chapter six of the succession planning series deals with ways to establish both the outside board of directors and the family council.

“The succession planning specialist can help organise the family council and the board of directors as they would have experience owning or managing privately-held businesses.”

Deloitte today released the sixth of an eight-part series which looks at the strategies and methodologies that may help families deal with the implications of the ‘family issues’ in a succession plan.

Part seven of the eight part The art of business succession series will be available in October 2007.