Splitting Up Together

Separations in family businesses are often precarious and though some are resolved amicably, most come with issues that need to be dealt with via a structured framework

- KETAN DALAL

THE GODREJ FAMILY'S decision to split their 127-year old legacy business amicably and harmoniously has been widely reported. There have been many such examples of family separations in the past. Some are done with great dignity, some not, and some are still embroiled in controversy and unseemly family battles in public view. The TVS Group arrangement and the separation in the R. P. Goenka family are good examples of a family separation done with grace.

On the other hand, the disputes in the Chhabria family (Prakash and Deepak Chhabria of Finolex cables), Raymond’s imbroglio, the siblings feud (between Baba Kalyani and Sugandha Hiremath) for the control of Hikal Ltd, are examples of unresolved bitter disputes.

INSTITUTIONALISING A FRAMEWORK

Many family businesses were established in a different era and have evolved, and in many cases, several family members across generations are involved in large companies with diverse businesses. Many of them lack a structured framework and conversations to institutionalise are sensitive. However, the need for an institutionalised framework is crucial and business families need to consider answering questions about the family’s ethos, rights of owners, alignment of ownership, employment policy, the guardrails, how to institutionalise communication and governance among other questions.