Corporate governance plays an important role to maximize the shareholder value and ensure the fairness in any business .But there are many businesses which come to an end because of failure of corporate governance.
On the other hand, Family businesses have been setting a unique model that mixes the rules with flexibility. Whenever there is generation shift in the family business, chances are 60% not to survive in the same way in future. Today family businesses are setting a unique model in front of corporate governance to run the business. Emami group, Dalmias etc – they all have created a success story. Emami group, two generations from two families. It is because of mentors of both the families that business is running smoothly.
If Radhe Shyam Aggarwal, Chairman of Emami group, gives advice to the sons of his business partner, they accept it. Similarly R.S Goenka has anything to share to Aggarwal’s sons, they always take it.
They have made a constitution but it is not like a legal document. Aggarwal says, “If we try to give it legal shape people will show it to the lawyers. If one family is not agreeing at any idea then it is not taken into account. That is why they do not have hotel venture because one family is in the favor of vegetarian and other is in non-vegetarian.
The effective tool in family business is mentorship which includes coaching, goal setting and sharing experiences. They use experience as a learning tool through examples.
Written by Shri Bhagwan student of 11th Batch.
He can be reached at shribhagwan11@taxila.in for feedback.