Tips to Create a Code of Conduct for Your Family Business

Few family businesses can grow and thrive without a Code of Conduct in place while other businesses may break down. It is therefore very important for a Family to develop a Code of Conduct document to improve the overall health of the family business.

The Code of Conduct is a written document that articulates expectations of how Family Members will behave inside and outside of the business. A well laid out Code of Conduct can address issues such as:

  • Communication
  • Conflict Management
  • Information sharing

Tips for writing a Code of Conduct

  • Use simple, clear language that all Family Members can understand
  • Use examples of acceptable and unacceptable behaviour to clarify points
  • Get professional help in creating the document

Before starting the process of laying down a Code of Conduct the following questions must be resolved:

  • What is the goal of the Code of Conduct?
  • Who are the champions’ of the Code?
  • Who is the Code of Conduct for?
  • What are the objectives?
  • Who all will be involved in developing, administering and maintaining the Code?
  • What is the standard process for developing the Code?
  • How are violations handled?
  • What is the accountability for breaking down the code of conduct?
  • Is the content and tone of the Code appropriate for the organization?
  • How does the Code reflect the organization’s mission, vision, values and culture?
  • How does an organization’s Code contribute to its long-term sustainability?
  • How has the organization determined its actual ethical risks?
  • How does the Code apply to operations?
  • What information should the founder receive?
  • How would the Code be introduced and explained such that the related people are adequately educated?
  • What procedures are in place regarding advice, issue resolution, or waivers of the Code’s application?
  • How is criticism of the Code handled?
  • What is the process for the periodic review and revision of the Code? How is compliance with the Code measured and monitored?
  • What measures does management take to confirm commitment to the Code?
  • What additional steps can members take to satisfy themselves as to the implementation of the Code?

 

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