CHAPTER 12
Governance Structures and Processes for Continuity
IN large and complex family business systems, ownership may be indirect and difficult to untangle. The family holdings are often tied up in trusts that have the effect of giving a few trustees ultimate authority over the company’s destiny. In many cases, the structure is designed not only to reduce taxes but also to prevent family emotions from disrupting the management of the business. The lawyers for the principal owner purposely design the trusts and write a shareholders’ agreement that will block any effort by dissident family members to challenge the principal’s control.
This containment strategy is, in my view, basically wrong-headed. It usually reflects the principal owner’s ...
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