Family Dynamics and Governance - Compass Point Skip to main content

Discover the importance of managing family dynamics to help your family business move to G2, G3, and beyond. John Bailey, a Compass Point Family Advisor, highlights how governance helps keep businesses from fracturing. Learn how to identify areas of tension, overcome emotions, solve conflicts early, and establish sets of rules that govern the business so your business can run smoothly. Remain a family outside of the business with Compass Point.


There’s a reason why only 33% of family-owned businesses make it to the second generation and even fewer make it to the third generation. The reason is, well, running a business is hard and including family members doesn’t make it any easier.

Hi, I’m John Bailie from the Compass Point team. Compass Point helps family-owned businesses like yours grow their business, create more aligned ownership, and greater family harmony in the process. Governance is paramount for family-owned businesses because, without adequate governance, businesses can and do fracture when…

  • No clear rules have been established
  • Parents are trying to treat everyone equally
  • Children perhaps have been given titles more than they have earned those titles
  • And the board perhaps doesn’t include adequate expertise from outside the business or outside the family or maybe, the board doesn’t exist at all

But, we’ve designed our Six Pillars of Family Business explicitly to include Family Dynamics & Governance because, frankly, this is what most other consulting firms and operating systems avoid or give short shrift to. And they avoid it because, frankly, it’s hard and it can be messy especially when emotion is involved. But really, at the end of the day, family governance is about establishing a few simple sets of rules that govern things like:

  • Establishing employment policies for family members
  • Clear guidelines for family members who don’t work in the business but have a lot of influence in the business
  • Setting up a board of directors to make sure that includes outside subject matter experts who can support the leadership and the owners
  • And defining protocols for solving family conflicts before they happen

When you do this work upfront before emotions and ego can take over, clearer heads can prevail when there’s a real, live issue on the table. So, have a look at the resources here on our website and, if you’re interested, schedule a 30-minute call with us. That 30-minute call can be the first step towards creating a legacy that your family has always wanted and it can also make sure you’re remaining a family outside your business.

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