NU IDEA #7 by AJ Guinto - a Company code book

NU IDEA #7  Family Corporation: What should've been done before everything else. I grew up with my family managing a then 20 year old institution that was passed on by my grandfather to my parents. It was easy for my grandfather who to choose in managing the institution since it was only my dad that stayed in this country and all our relatives had already migrated abroad. And now, since my brother focused on taking the corporate lifestyle, it was easy for my dad to designate me to manage the institution next. During this months that had turned into years that operations of the institution is being passed on to me, I can't help but read books and some articles regarding family owned corporations. Their pros and cons and how it should be handled. From my own experience, and for some articles that I have read I can conclude some things that are important in starting a family corporation, especially when the plan is to make it really big. 1.)    Code of Ethics a.       This is very important in any organization, but I need to stress out on this one. Since growing as family means everyone is comfortable with each other, but doing business should be treated very differently. A mere tardiness and absence should be taken seriously and should be addressed right away. 2.)    A rule on who to pass on the management a.       May it be the traditional way like the Chinese people where the first born son will take over the company or to any culture that gives it to the youngest, the point here is, it should be stated, it should be made known to everyone. Ideally for me, it should be given to the person who is most qualified, otherwise, running a business to ruins doesn't benefit anyone in the family in the long run. 3.)    The Patriarch/ Matriarch a.       There should always be that one person that would decide on the next move of the company, and everyone else should support his or her decision even if they disagree. Because at the end of the day, it is everyone's business. These are only some of the things in my mind, there could be more but that would entail writing a whole book. 3 AJ GUINTO