Keeping family firms on track

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Family businesses in the Sheffield region are being urged to draw up their own written charters to make sure they don’t lose their way as future generations take over, according to a prominent local accountant.

Richard Frost, from accountants and business advisers Hawsons, says three out of every four businesses in the Sheffield region are family owned or run and they employ about half of the local workforce.

Mr Frost says a written charter can help family owned firms to avoid potential problems.

“As shares in family businesses pass down to subsequent generations there may be less involvement by some family members and they may not understand the history and legacy of the company,” said Mr Frost.

“With wider family ownership, it becomes more important to involve the whole family so that issues such as their vision for the business, its values and their involvement in it can be clarified.

“The charter can be an important part of the governance structure, setting out the principles the family agree should apply to the business and encouraging family members to engage in, and provide constructive guidance for, the family and the company.

”The process is a way of helping to avoid some of the problems and tensions that can affect a family-owned firm.”