NO. CONTRACTS ARE JUST AS IMPORTANT IN FAMILY BUSINESSES AS IN OTHER COMPANIES.
A family member who is not contractually obliged to fulfill a well-defined role in the company can be difficult to manage. And the superficial contract can become a source of uncertainty and confusion for the daughter, brother, or brother-in-law who should be able to rely on it.
What are the criteria for success – and what am I actually allowed to do? Without the framework provided by a solid contract, there is a greater risk that family dynamics will lead to irresolvable conflicts. When I was the daily manager of our family business's Norwegian division, I often went it alone to solve my division's challenges according to my own ideas.
It wasn't very professional, and in fact, I ended up feeling stressed about the uncertainty surrounding the situation. A well-drafted contract would have helped. The flimsy contract was like a lack of control – but also like the absence of a process that should have clarified my role when I became part of the company's management.
The result was that no one could take out a piece of paper and say: "We may disagree, but this is how things stand!" What is your experience with contracts in family businesses?
