A formal process for managing conflict

By Carrie G. Hall

Just as businesses have contingency plans to address various threats, family companies should also have a plan in place for managing family disputes before disagreements escalates and tensions rise.

Here’s an example of what such a process might look like.

1. Create a standing committee of trusted family members (five to seven people) before any conflicts have erupted.

2. All family members should have access to the committee. The committee should be proactive.

3. Committee members should regularly poll family members employed in the business so they can get a sense of trouble brewing before it explodes.

4. If a conflict is recognized, the committee will determine whether something should be done or whether the matter can be resolved without intervention.

5. If the committee decides that action should be taken, it will impose a cooling-off period.

6. The next step involves mediation with the parties involved and two or three members of the standing committee.

7. If that does not work, the committee should bring in professional counsel.

8. If the issue remains unresolved, the conflict should go to the full committee for adjudication.

9. If there is still no agreement, the parties should be encouraged to submit to binding arbitration before lawyers become involved.

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