The family charter documents family values and behavioral norms. On the one hand, the process of which family members reach consensus during the discussion about values and behavioral norms for the family charter will promote the emotional relationship among family members. On the other hand, family values and behavioral norms are constantly instilled into descendants. All family members who are in unison of values and behavioral norms reduce the conflicts they may encounter in decision-making.
The family charter is one of the important tools for family businesses to sustain their development. The family charter is able to clearly define the boundaries and s between family governance and business governance, establish a formal governance mechanism between the family and the business, set up the employment policy for family members and the business succession plan, so that it enhances the communication between family and business, and reduces the family's impediment to the business development.
The family charter provides a clear and definite succession path for family dominance power and family business leadership, which effectively reduce the disputes that may occur when family members competing for family dominance power and family business leadership in intergenerational succession. Additionally, it provides a default solution or problem-solving mechanism for the special circumstances which family may encounter in the future, and avoid serious consequences and impacts on family or family business.
In conclusion, the purpose of the family charter is not only to write a document, but also is a process of helping family members to explore common values and develop harmonious relationship. For the large family which has lots of family members and big family business with the wish of descendants’ unity and successful family spirit and business succession, it is more necessary to have a family charter.
Research and Questionnaire Design Phase
For the purpose of this project and the demands of the client family, establish a family charter advisory group;
Conduct due diligence on the family status for the family, including but not limited to, family members’ personal information, life experience, marital status, relationships with other family members, connection with family business, etc. Analyze the problems found out during the due diligence, provide legal advices, and issue due diligence memorandum;
Jointly design an questionnaire of family charter for this project with lawyers and other professionals in China, Canada and/or other relate jurisdictions;
Family Charter Formulation Phase
According to the questionnaire of family charter, provide the family meeting schedule;
Convene or participate in the family meetings, discuss and confirm on each specific issues with family members, and discuss with family members one-on-one if needed;
Draft a family charter d on the consensus formed by family members' discussions;
Gather lawyers and other professionals in China, Canada, and/or other jurisdictions involved in this project to provide legal advices on the family and family members' legal issues related to family charter and family governance;
Gather lawyers and other professionals in China, Canada, and/or other jurisdictions involved in this project to discuss and revise the family charter;
Convene one or more family meetings to discuss and revise the family charter, until the family charter is finalized;
Assist the family in learning and implementing family charter;And
Assist the family to establish a family council or similar functional organizations;
Assist family to the family charter with the offshore family trust structure.