More than 70% of companies in Belgium are family-owned. However, these companies are particularly vulnerable to tensions…

The saying ‘to govern is to foresee’ applies fully to the business world, and even more so when it comes to family businesses, where emotional and professional dynamics intertwine. Waiting for a crisis to erupt before taking action is a common mistake: only the implementation of professional corporate governance can limit risks and ensure sustainability.

Family businesses are particularly vulnerable to tension. Family conflicts can spill over into the business, and conversely, professional issues can sour personal relationships. If left unchecked, these emotional interactions can block decision-making.

Certains exemples emblé Some notable examples have shown that internal disputes can even jeopardise the very existence of a company (1).

Family businesses account for around 45% of employment and are an essential part of the economic structure.

The stakes are high. In Belgium, more than 70% of businesses are family-owned. They account for around 45% of employment and are an essential part of the economic fabric. However, their vulnerability to internal conflicts remains a sensitive issue

The sources of tension

Among the main sources of tension are:

– Confusion of roles, with excessive concentration of powers or a lack of clarity in responsibilities.

– The importation of family patterns into the professional sphere. Old frustrations, sometimes stemming from childhood, may resurface.

– The disengagement of non-active shareholders who feel poorly informed, unheard or excluded from decisions.

–  Generational differences when the cohesion between the founders is not reflected in the next generation.

– Disagreements over succession between those who advocate family continuity and those who envisage selling to third parties.

– The discrepancy between skills and roles can create a sense of nepotism or inefficiency.

The solutions

In the face of these challenges, there are several levers that can be used to strengthen governance:

It is essential to involve not only shareholders but also employees, customers and suppliers in certain key discussions.

– Define a clear strategy: developing a strategic plan aligns visions. A family council can monitor progress, while operational management is entrusted to the management team.

– Involve all stakeholders: it is essential to involve not only shareholders but also employees, customers and suppliers in certain key discussions.

– Clarify everyone’s roles: organisational charts, job descriptions and performance reviews prevent a lack of objectivity. The three-circle model (family, business, ownership) also provides a better understanding of the dynamics at play.

– Addressing sensitive issues without taboos: an honest assessment, carried out with an expert, allows you to identify strengths and weaknesses and deal with potential tensions in a professional manner.

– Surround yourself with external expertise: independent directors who share your family values can provide a neutral perspective and help you avoid emotional pitfalls.

– Promote open communication: this is not just about providing information, but also taking family sensitivities into account. This communication creates a sense of belonging, particularly for non-active shareholders.

– Adopt a mediating stance (2): listening, showing kindness and seeking shared solutions often help to defuse tensions and prevent further ones from arising.

The tools of good governance are well known: family charter, shareholder agreement, strategic plan, executive committee, etc. Beyond these instruments, it is their adaptation to the specific reality of each family business that guarantees their effectiveness. This approach requires the involvement of as many parties as possible and is based on a climate of trust. Implementing governance in a family business also means recognising the complexity of human relationships. Establishing a structured framework allows you to build the future with peace of mind.

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1) As was recently the case with bus manufacturer Vanhool, for example, although the cause of this bankruptcy was multifactorial.

(2) This Mediation Attitude is one of the cornerstones of FB Mediation, which offers mediation and governance solutions for family businesses.

Tanguy della Faille

Partner FB Transmission

tanguy.della.faille@fb-transmission.com