1. Establish eligibility rules: These rules clearly define when and under what circumstances family members are welcome to work in the business.
2. Educational experience: These rules outline what education and/or outside work experience is required.
3. Roles and responsibilities: These rules outline what happens when family members join the business. Must they fill a vacant position or will one be created for them? Will family responsibilities be different from non-family members performing the same job?
4. Performance evaluation: This establishes the job criteria for both family and non-family members. Who will monitor a family member’s performance and how will that performance be measured and evaluated?
5. Compensation: Should all family members be paid the same regardless of responsibility? Should family members be paid on the same basis as non-family members? How about annual bonuses?
6. Ownership: Family membership does not have to mean business ownership. Should all family members be shareholders? Who can own shares in the business? How is the business valued?
7. Marriage implications: These rules outline what will happen in the event of a marriage breakdown or death in the immediate family.
8. Spouses/In-laws: Some businesses have rules which govern how and if spouses and in-laws will be employed in the business and in what capacity.
9. Children, grandchildren and other relatives: These rules outline what happens if children, grandchildren and other relatives want to work in the business.
All of these items may not seem necessary in your family. You would be wise, however, to at least consider the implications and consequences of your current family participation against the items we have listed above.
A little advance planning could very well save you and your loved ones some very difficult family encounters in the future.