Harvard Business Review Family Business Handbook

4.

Decide

Structure Governance to Make Great Decisions Together

The decision-making power of the owners of a family business is profound.¹ In some sizable businesses, not a dollar can be spent without the approval of the owners. But that doesn’t mean owners should be making all those decisions. As the size and scale of both your family and your business increase, the role of owners is less about making decisions directly and more about exercising decision-making power effectively. When held too tightly, the power to control all decisions will stifle the business and the family.

That’s where governance comes into play. Good governance helps owners balance the need to maintain control over what matters most with the need to delegate responsibility ...