Uncategorized November 29, 2010

Keeping a lid on family business

gordon

One imagines that Christmas dinner at Gordon Ramsay’s house might be a solemn affair this year and it almost certainly won’t involve the in-laws. The celebrity chef’s very public bust-up with his father-in-law and former CEO has been keeping the headline writers busy for weeks and his open letter to his mother-in-law will have done little to smooth things over.


While Mr Ramsay’s problems are extreme, his situation will have sent a shiver down the spine of anyone running a family business and there are a lot of them. According to the Institute for Family Business, family firms account for 65% of private sector enterprises in the UK economy. They provide one job in three throughout the UK and they pay £73bn per annum in UK tax receipts. 

Family businesses are big business but potentially they face stresses and strains which other corporations and organisations do not. It could be argued that the qualities which give family businesses their strength (shared values, a common goal and familial responsibility) are also, possibly, their Achilles’ heel. Board room bust-ups can be savage but how much more damaging might they be if the argument continues over the family dinner table?

The accusations and counter accusations continue to fly at Gordon Ramsay Holdings but among all the confusion, one thing is clear: the roles and areas of responsibility of the different parties had become hopelessly muddied. Mr Ramsay may have cooked his goose but other family businesses can learn from his misfortunes. A written agreement setting out each family member’s roles is a good place to start as is a clear process for making decisions. Writing in Scotland On Sunday, Susan McFadyen, a partner at Tods Murray and a member of the firm's Families in Business Team, has some sage advice for ensuring that family and business mix happily.





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