Code G Family :Business :Environment

Governance Guide for Families and their Businesses

Growing the family business:

Continuum AGWehntalerstrasse 3CH-8057 ZürichTel +41 (0)44 368 50 15Fax +41 (0)44 368 50 11www.continuum.ch

Prager DreifussMühlebachstrasse 6CH-8008 ZürichTel +41 (0)44 254 55 55Fax +41 (0)44 254 55 99www.prager-dreifuss.com

3

4

5

1 8

2 10

3 11

3.1 11

3.2 12

3.3 12

3.4 12

4 13

4.1 13

4.2 15

4.3 16

4.4 17

4.5

18

5 20

5.1 20

5.2 21

5.2.1 21

5.2.2 23

5.2.3 23

5.3 24

5.4 25

5.5 25

5.6 26

6

6 27

6.1 27

6.2 27

6.3 28

6.4 28

6.5 29

6.6 30

31

33

7

8

1

9

10

2

A three step procedure

Best governance in family businesses must be implemented in stages.

Best governance must be structured from the inside out.First of all, the "personal/inner dimension" must be clarified, the need of the family and what is actually possible as well as the consideration of the consequences for the family and the business.

It is important to instrument and document the process of change adequately.

A timetable will show how the range of instruments is being applied in the various target groups.

2 31Identify expectations and

opportunities, assess the

possible consequences

Agree on the basis

for making plans

Carry out changes

to the structural and

legal conditions

11

3

The target groups of the family business

Environment

Business

Family

12

The player involved in "best governance"

Family Business Environment

Manager

Supervisor

Owner

Member

Shareholders

Board of directors

ExecutiveManagement

State

Public

Customers

Employees

Business partners

Investors

13

4

14

15

16

17

18

19

20

5

21

22

23

24

25

26

27

6

28

29

30

31

32

33

34

Name Date

existing completed

responsible

Family Governance (Chapter 4)

– family charter (18)

– wealth strategy (21)

– family reunion (24)

– family council (28)

– internal communication (30)

– image presented to the general public (33)

– exemplary role of the parents (35)

– selecting a successor (36ff., 67ff.)

– wills (39)

Corporate Governance (Chapter 5)

– corporate vision (44)

– business strategy (45)

– organisation concept (46)

– organisational regulations (47, 53)

– non-family members on the board of directors (49)

– board as a sparring partner (50)

– power of the family to issue orders (53, 54)

:

:

– marriage- and agreements on succession (39)

– emergency plan for loss of the head of the company (40)

– inclusion of the company members (55)

to do to be finished until

Name Date 1/2 2/2

existing completed

responsible

– shareholders’ agreements (56)

– regular risk assessment (58)

– monthly reporting (59)

– system of remuneration (60)

– principles of leadership (62)

– employee development/motivation (64)

– assessment systems for management and staff (66)

– advanced training for the members of the board (66)

Public Governance (Chapter 6)

– environment concept (72)

– customer satisfaction/retention (73)

– employee information systems (75)

– financing growth (76)

– relations with business partners (78)

– company image in public (79)

– public relations (81)

:

:

– planning the introduction of the successor (69)

– inclusion of the next generation (70)

– politics, specialist and industrial federations (82)

to do to be finished until

Corporate Governance (Chapter 5)

Name Date

existing completed

responsible

Family Governance (Chapter 4)

– family charter (18)

– wealth strategy (21)

– family reunion (24)

– family council (28)

– internal communication (30)

– image presented to the general public (33)

– exemplary role of the parents (35)

– selecting a successor (36ff., 67ff.)

– wills (39)

Corporate Governance (Chapter 5)

– corporate vision (44)

– business strategy (45)

– organisation concept (46)

– organisational regulations (47, 53)

– non-family members on the board of directors (49)

– board as a sparring partner (50)

– power of the family to issue orders (53, 54)

:

:

– marriage- and agreements on succession (39)

– emergency plan for loss of the head of the company (40)

– inclusion of the company members (55)

to do to be finished until

Name Date 1/2 2/2

existing completed

responsible

– shareholders’ agreements (56)

– regular risk assessment (58)

– monthly reporting (59)

– system of remuneration (60)

– principles of leadership (62)

– employee development/motivation (64)

– assessment systems for management and staff (66)

– advanced training for the members of the board (66)

Public Governance (Chapter 6)

– environment concept (72)

– customer satisfaction/retention (73)

– employee information systems (75)

– financing growth (76)

– relations with business partners (78)

– company image in public (79)

– public relations (81)

:

:

– planning the introduction of the successor (69)

– inclusion of the next generation (70)

– politics, specialist and industrial federations (82)

to do to be finished until

Corporate Governance (Chapter 5)

Code G Family :Business :Environment

Governance Guide for Families and their Businesses

Growing the family business:

Continuum AGWehntalerstrasse 3CH-8057 ZürichTel +41 (0)44 368 50 15Fax +41 (0)44 368 50 11www.continuum.ch

Prager DreifussMühlebachstrasse 6CH-8008 ZürichTel +41 (0)44 254 55 55Fax +41 (0)44 254 55 99www.prager-dreifuss.com