Family Constitution: in the fundamental law of the industry

With the Auchan group companies such as France Murri Yates family, has spread to the fifth generation, the 780 heir, but family management continues to be arranged in good order, family enterprise value have continued to grow, thanks to the family of the guidance of the constitution. Each a sustainable business Chinese entrepreneurs, should seriously consider a part down from generation to generation of the family constitution.

The author on many occasions and entrepreneurs to exchange, find their heart thing is not only to expand production capacity and market, low cost, financing, care staff, business affairs, and some lingering family distress. Many entrepreneurs ask: I gave life and education of their children the best, why does he (she) always contradicting me, not willing to help me with my work, or even run away? How do I pick up my training class the next generation? There are entrepreneurs ask: joint venture at the beginning of our brothers, share sb.'s joys and sorrows, but how to do in the cause of slightly into or married after the conflict,? There are entrepreneurs ask: I finally successful, is surrounded by many friends need, family elders accused me of career success. Why don't you take care of relatives, how to deal with?

You know, these problems are from the annual sales of more than one billion, 10 billion yuan of corporate leadership. They can command tens of thousands of employees and shopping malls, but to manage a home seems incapable of action. However, they all know that, if the family can not solve, career and wealth he worked in the future, will be overshadowed.
Family problems of these first generation Chinese faced by entrepreneurs, enterprises derived or family problems, in fact, in the world of business family history has repeated. Business family harmony within those, the most common fate is the enterprise with the family decline and fall or change others. But there are also many family can find out they are willing to comply with the common value generation in conflict, and the establishment of a family norms and system; a harmonious growth of the family, has also become a driving force for the development of enterprises, enterprises have become the generations of hundred years old store.

Management experience of the Murri Yates family
With the French Auchan group (Auchan) and many other enterprises Murri Yates (Mulliez) family, a good interpretation of family governance system. In 1903 Louis Muriez (Louis Mulliez) was established in France in the small textile factory - Filda (Phildar), after the two World War. The growing. In 1956, FIRDA established the first franchise stores, by the end of the twentieth Century, FIRDA has 1500 retail stores.

Louis's grandson Gerard Muriez (Gerard Mulliez) in Filda's business from retail experience. In 1961, only 29 years old, Gerrard opened the first grocery store. Although the first shop is not successful, but with the help of his family, Gerrard in northern France successfully created the Auchan supermarket chain (Auchan). The ultra low price to attract consumers, success in the French retail giant auchan. Within 30 years, Auchan landed in 12 countries, employs 175000 people, become one of the world's leading multinational retail group.

The other members of the Murri Yates family are also in the market to show its mettle, set up including sports supplies supermarket decathlon (Decathlon), auto repair shops, clothing stores, clothing home Norauto (Kiabi), parity chain restaurant Flunch, pizza chain building materials supermarket Pizza pai, Leroy Merlin (Leroy Merlin), home appliance retailer Boulanger, equipment rental company Kiloutou, chain supermarket companies such as Simply Market (Figure 1). These companies employ about 366000 people, turnover of 66000000000 euros, they are all from the family ultimate holding company CIMOVAM control.

The Murri Yates family have a flourishing population, Louis Muriez fathered at least 11 children, the eldest son has 13 children, other children are also very "prolific". The family is currently in the fourth, the five generation of transition period, a total of 780 successors, of which 550 were family AFM (Association Famille Mulliez) member of parliament. AFM was founded in 1955, was set up to help businesses founder will gave 11 heir. Members of parliament must be family members, and need to be approved by the AFM advisory committee. The Advisory Committee is chaired by Thierry Muriez (Thierry Mulliez), in 2010 he was elected fourth times.

The Murri Yates family number of exponential growth, but the family can be arranged in good order, unified benefit first from the family core values. The Murri Yates family from generation to generation of the Catholic family motto is, "each thing (Tous dans tout)", stressed that the family unity. Any wish to participate in the family business members must comply with a religious charter, such as "money is fair, it is used to reward the diligent work, and for everyone to investment". Mother and teacher charter source encyclical "to Pope John twenty III" (Mater et Magistra). Family members of Andre Muriez (Andre Mulliez) said: "we join Murri Yates, as if to join religious groups."

In the "doctrine" under the guidance of the family identity, everyone can become a family business owner, also can have the equity. For the protection of the interests of others, no one has the right to unilaterally change the asset structure of their own. Whether in the family in what position, each share corresponds to a fixed proportion of the family property. In any case, the interests of the family is always higher than the personal interests.

Of course, in addition to the core values of family, the Murri Yates family had a set of mature family governance mechanism. The family has four institutions, namely the Murri Yates Family Federation - AFM, AFM Advisory Committee, family ultimate holding company CIMOVAM, family especially private funds - CREADEV (Figure 2). The Family Federation general family council, composed of approved family members, the members elected Advisory Committee (i.e. Family Council). The Advisory Committee purpose is to ensure the family interest prior to the individual interests, its responsibilities include decided whether to participate in venture capital investment activity; judging strategic decision of CIMOVAM company is feasible; approval of family members into the AFM. The Advisory Committee every four years to elect a; Committee members must be 4 or more in the family enterprise management for 4 years or more of the shares of the company the holder support; more than 50% of the members voting for AFM. The Murri Yates family private fund for special economic assistance to establish family member companies.

In the institutions under the coordination, clan culture also have fixed process. Heir should first accept the family education, family traditions of business opportunities and the entrepreneur ability of discrimination, and loyal to the interests of the family and obey regulations. The Murri Yates family is not respected top business school degree. Through the family training and received an AFM Advisory Committee approval, heir to allowed to enter the AFM, has been holding company CIMOVAM shares. Then, the inheritance may choose to enter the family business or to do poineering work independently. Entering the family business must start from the grass-roots level, to avoid the high pass incompetent offspring, so that enterprises in crisis. Independent entrepreneurial success will be rewarded, failure will be punished. For example, Gerrard's son Amaury Muriez founded in the fast-food business failed, lost his majority shareholding.

The Murri Yates family ownership concept is, every family heirs can become a family business owners, and get CIMOVAM shares. But the allocation of shares 550 AFM members is not the average. In order to ensure the prosperity of the family enterprise, the family unity and long-term development between different generation system, members can increase or decrease the extent of their participation in the family business. Therefore, AFM is held every year trading equity within the family, company value at this time will be re evaluated. In the AFM Advisory Committee under the supervision of the AFM members, can be traded shares, but the premise is not emphasis on individualism, one-way transactions harm the interests of the family are not allowed.

It is not difficult to see, the governance mechanism of the Murri Yates family uphold the family core values, and in detail making everywhere maintains the core values are not infringed. Under the guidance of family, the success of the fifth generation took over the business. 1999-2009, France's CAC40 index decreased by 25%, according to estimates, the Murri Yates family enterprise shares rose by 150% in value.

Family constitution can help China commercial family? The development of the Murri Yates family and the family business, apparently crucial thanks to a specific set of Family specification - family constitution. The common beliefs of their core philosophy from the Catholic family, a clear and how to foster family heir, encourage family members to participate in, to allow exit, therefore, it can not only generation is observed, and can keep pace with the times. Many people may ask: China family small population, as the constitution expressly regulated family Is it right? Overkill? The answer is: family constitution non is the purpose, of its exploration and development process can help entrepreneurs and family focused on finding the common value, harmonious development, and should therefore be given serious consideration.

China although "YanShiJiaXun", "public" temperature fan, but the basic to discipline, rarely clear rewards and punishments, the division of property and other sensitive issues. Chinese people also seems to be not used to write down rules, how is the unwritten law. Family constitution not strictly legal documents, but put it down in black and white help family clear the core value, enterprise goal, reward the virtuous, prevention and solution in fighting. Today's business family second generation of western education, advocating freedom, democracy, and start empty-handed founder often centralize power on major issues. The value of the difference between the two generations of the family management often leads to difficulties, family constitution is a traditional Chinese possible ways to solve the. Through the acceptance of the provisions, the second generation is not under the flag of freedom capricious founder, also not dictatorial. Although both sides have sacrifice, but is the best for the family and the enterprise.

Every cause early into a sustainable business, Chinese entrepreneurs, should take a pen and paper to write down his business as the idea of value of life experience, then write ten to dozens of oneself and family members to implement this core value concept should practice standards. In any way finding behavior norm, is especially important for China first commercial family, because we don't like western family, there is a strong traditional culture value guidance among family members and the rights and obligations of our traditional values such as Confucianism, wander in the last hundred years later were thick dust.

Entrepreneurs write Family specification, only the first step. The next question you have to ask yourself: I will not stick to the rules? For example, the habit of authoritarian parents can abide by family affairs to write their own must discuss rules votes. Also, because the derailed her husband's behavior, the relationship between entrepreneur marital discord, if this laissez faire behavior no matter, can see, children will become a victim of the husband and wife, their values can be distorted, the enterprise may not have long-term development in this family. How to change this family is downward trend? A sustainable business entrepreneurs, they will change their behavior, to restore the love and trust the other half. Then, the family will successfully practiced on family loyalty norms. In short, entrepreneurs have been family constitutional constraints or veto the experience in practice, is the milepost family constitution was implemented.

The third point is the family code must pass through the family members to discuss common decision, the future modification of the clauses shall be by family members in accordance with the provisions of the constitution of the family to discuss and complete. In other words, family constitution not entrepreneurial parents a one-man show, are not rigid and remain stagnant of stereotyped writing, but the present and future of the family members should pursue, and willing to defend the family value clause. In order to achieve this objective, make family constitution must be through continuous discussion and revision of the family members. Family interaction in this process, but also help promote understanding and trust each other family members.

How to build a family constitution?

So, Chinese commercial family should how to set up family constitution, as an important family governance tools? Generally speaking, family constitution to clear the family core value, processing way clear sensitive issues, the family management system. The content include the mission statement, the family core values, family Committee and board of directors of the bilevel programming etc..

Behind many enterprises of the East and the West family, have written family constitution, Auchan group, and the Ford American car, Japanese words of soy sauce, Hongkong Lee Kum Kee etc.. Although Chinese family in a hundred years ago a Confucian family, family education, but in modern times, decline of Confucianism, the traditional no longer, a lot of Founder when one has passed away, his dowry, check evidence of both parties at court, cause uproar, but "you can say it again", housework and mixed business more difficult, therefore, the best family by family problems to solve the. The purpose of family constitution is in the family, within the framework of prevention, to solve the problem, so as to better enterprise, to achieve everlasting.

Family mission and values

Family constitution general clarified first mission, for example, "the family constitution set the family governance, a total of asset management, sharing resource allocation, conflict mediation, to carry out business rules and process"; and, "our long-term goal is to ensure that the harmonious family, friendly, kind of the family, on the other hand, development and security maintaining a career can be handed down from age to age. Through open and honest communication and wise planning, we try to avoid conflict may cause the family division". The Chinese family businesses, family constitution the direct objective of nature is the perfect family governance, implementation of the first generation of smooth transition to future generations.

Family constitution in chapter second, the core value of general clear family. A major advantage of a family business is family cohesion, the sources are members of the family for the core values of identity. Therefore, the common value core values to reflect the most family members. Many family enterprises China has not yet formed a core value, which is a good opportunity to establish good values in the family, written constitution can first write down the target value.

Family members' rights and interests
The main part of the constitution should be the rights and obligations clear family members. In Chinese of the Warring States period, the implementation of strict law, mainly in order to strengthen the autocratic monarchy rule, people's rights are very limited, often need to "sacrifice for the country". While the constitution of modern western emphasis on individual rights can not be violated, not dictatorial ruler. Between family constitution should be between two persons, control the family rights executive tyranny, also cannot too much emphasis on individualism, the family becomes lacking spirit of cooperation.

China family paternalism seriously, founder of the authority may be difficult to challenge, but on the second, the three generation, autocratic obviously cannot sustain a family, therefore, family members of the family of constitution should endow certain rights, this is to protect the interests of the family.
The most fundamental interests of family members share enterprise ownership and management right. If the family wants to keep control of the enterprise, in writing the constitution should be to ensure that family ownership, management as the goal, and make the non family members willing to family enterprise effectiveness.

- ownership. Founder general owns most of corporate ownership, the ownership to transfer to the next generation, can regulate the family constitution. We see, Murri Yates family of specifications to ensure equity can be assigned to identity family concept, have the ability to business a warm family members. Note that we emphasize is "how to" not "behoove" handover, handover. Especially Chinese family next generation are mostly only children, early determination of equity ownership, probably the power succession lost its founder, should consider let the successor to maintain a sense of urgency, conditional, phased transfer of shares, such as the completion of education, certain achievements have been made in the family business in the grass or other companies to exercise a few years, later, can eventually inherit shares. Of course, the transfer of ownership nor too late, let the successor can see the share equity inheritance hope, otherwise it may cause it to lose interest, leave the enterprise. In any case, the equity allocation and scheme should be family constitution.

If the family has "predetermined" ownership, and the equity is not evenly distributed to a number of family members, so we should further consider how to distribute dividend, in order to ensure that enterprises have sufficient resources to continue to grow and fair treatment of no operation rights of the family of small shareholders balance. Also should pay attention to is, dividends tend to. If family members who enjoy large dividends, may have to rely on. Once the decline in performance, the dividend amount of family members, may lead to dissatisfaction, and even lead to infighting. Therefore, can make clear the hook dividend and performance in family constitution in practice.

The management rights. Family constitution should significantly space to standardize business ownership. China family business because of the first generation, the vast majority of parents say. But parents make mistakes, how to do? Parents retired, no father son authority, how to do? Wise parents should be thinking a handover distribution business the right way.

The western family in individualism and traditional Christian background, tendency by the entrepreneur's dictatorial transition to democracy collegiate system. All members of the family. Family Council, bilevel programming system and set the 5-7 people in the Family Council and the board of directors of the enterprise. However, this system into the China will obviously The climate does not suit one., because the Chinese family tradition is top-down vertical parents authority. How to find the balance point between traditional and democracy, is a big lesson China family business governance. Hebei Dawu group is trying to "constitutional monarchy" family business, the board of supervisors, the board of directors, board of directors are entitled to the ownership of the enterprises, decision rights, management rights, "separation of the three powers", is Chinese forerunner of modern family management, the actual effect is yet to be observed.

For this, we might as well have a look Chinese family can be a bilevel programming system into the west, and then because of the unique concept of the culture and value family adjustment. For example, in the Family Council and the board of directors of the voting system, to give parents the veto; or on the authority of parents with traditional, family and board of directors on parental veto. The exercise of the veto, can imagine will be very rare, the party in power must be used cautiously. Because of the frequent veto failed, as family management system. The veto, is to retain the power of final decision serious conflicts in family opinion, decided to prevent family can not make, or make biased decisions without being observed, even the family rupture.

In addition, can consider hiring non family members in the Family Council and board of directors, have strong family members to the men of patience to listen to, and objectively consider the different opinions of other vulnerable members of the family. These non family members also may put forward suggestions on major issues, for the family to talk about objectivity.

Foster family heir

In order to make the ability of family members to exercise the family business, with ample opportunity to participate in the corporate management, family by family members in the constitution must retire before 65 or 70 years old. If you really can not, can have the excluding clauses, such as the board of directors of the enterprise unless approval. To train the next generation, the enterprise can be under the age of 30 family members to establish internship program, so that the younger generation to understand the operation of enterprises, and gain experience as soon as possible, and will determine whether they participate in the family business.

For example, Colop (Kropps) family constitution stipulates: "seeking permanent work in the family business family members, there must be at least 5 years working experience in family company outside. At least 3 years must work in the same employer, and at least 2 promotion or similar evidence of performance, ability, responsibility and reliability is improved. We think, if members of a family are not first in other places to become a valuable employee, so he in the family company may neither happy nor productive."

Rules that members of the family, make efforts to obtain in the enterprise opportunities by themselves, and get a real sense of achievement. Of course, if must have work experience in a family company, is not universally true. Such as the Murri Yates family that, within the family learning experience than to obtain formal degree and family enterprise experience more useful.

Code of conduct

Family members enjoy family in constitutional rights, should do their duties to the family and the enterprise. In addition to the core value and improving family cohesion, but also with the rigid governance mechanism and strengthening management.

Should contain detailed code of conduct family constitution, to the business behavior, such as "in addition to the normal business, family members of the banned the family enterprises funds by individuals or companies"; to individual behavior, such as "working day night drinking". Even the provisions in the constitution of Lee Kum Kee family, family members not to marriage, divorce, not having an affair.

If there is illegal, should be carried out according to the regulations on punishment sanctions, such as "first fine, heavy fine again, third offensive demotion, fourth times repeated offense and get rid of the enterprise".

Withdraw of family members, Conflict Mediation Program

With the growth of family, family members often inevitable exit enterprise. In order to safeguard the family ownership, management rights, family members have an obligation to inform the family early in the exit of enterprises. The family can be set up mobile funds, to buy out members of the equity. If the enterprise is not listed, by an external independent valuer to assess the value of enterprises. Only in the remaining family shareholders do not want to take over transferable shares, shares could be sold to outsiders.

Conflict within the family inevitably greatly small, need to clear is, family members have an obligation to resolve the conflict in the family within the framework, there is a skeleton in the cupboard. The general conflict mediation is divided into three steps: 1 family of informal communication; 2 Family Mediation Committee; 3 third party intervention. If the final can not solve, related only to sell their stake in the family enterprise or turnover.

Revised family constitution

The target and the role of family constitution may change over time, and make corresponding modification should also be family constitution. The constitution should be clearly defined to modify the process, Family Council every three years to conduct a review of the constitution, and listen to the opinions of all the members of the family. In the family Committee under the authority, but also on the family of constitutional review carried out by the third party. The family committee appointed a team responsible for constitutional amendment.

The draft amendment to the family council voted last. Provisions of some family constitution, any modification to unanimously to take effect, because the family consensus is "minority interests are equally important, and to a greater degree of protection, to prevent the rules and procedures may be isolated or weaken its role".

How to promote the family constitution?

In order to effectively carry out family constitution, constitutional values must be the common value and family, society. Although USA advocate of individualism, but in the core values of freedom, democracy under the guidelines, the United Nation's cohesion than autocracy. Family constitution carried out the index of success, should be the family members like Americans worship freedom, democracy as "worship" family constitution.

First of all, should be like a religious founder of crazy sort ground firmly believe that family constitution. China since ancient times, adhere to the "Confucian", seems to be quite different tradition. But if you don't believe their founder, nature also won't believe, therefore, the founder to "blockhead", to "fool" yourself first. At the same time, convincing family constitution, must guarantee the rights and interests of family members, so that they feel that democracy is a good law.

Secondly, the founder and first generation should set an example by personally taking part, especially in its own right to enjoy the unfavorable terms set an example by personally taking part, sacrifice, and top-down implementation. USA Founding President Washington in two term after the expiry of active abdication, do a good example for future generations. If not Jun Jun, is not minister, the father not the father, the son. "Teaching without words" is easy to say, really do not. Fortunately, if you have a family constitution, each generation will be constrained. But in any case, the first generation of performance, the constitution could be thoroughly implemented family plays a key role.

In order to let the family members receive a better family constitution, the family can try some easy way of publicity. Often about propaganda target eat barbecue, tennis Christian missionary, the family can also be regularly hold some parties, tourism activities in the influence character by environment, form and strengthen family core value, promote family constitution. In addition, also can offer a course, the next generation on family history, value concept and enterprise management, promotion of family constitution.

Finally, according to the family constitution, family will not abide by the constitution of the members out of business. Four Seasons Hotels founder Isadore Sharp for the implementation of the "Four Seasons Hotels" golden laws and precious rules, has spent nearly ten years time. Meanwhile the difficulties, Isadore had to dismiss does not believe in the "golden laws and precious rules" executives, employees, and promoted that "golden laws and precious rules" of the younger generation, and eventually formed a high service quality of hotel culture. Family members usually cannot be excluded, but family members of enterprises can choose to believe in and follow the family constitution. Although the family constitution embodies democracy, but at least in the early stages, the promotion of democracy often cannot do without a tyranny.

British mathematician, philosopher Alfred North Whitehead (Alfred North Whitehead) said, the European philosophy is a series of Platon footnote. Similarly, a family of all future development, all cannot do without the core values of family, and the family constitution is equivalent to Platon's "ideal country", the The Four Books Chinese, is the fundamental text to establish and protect the family core values. Western civilization has gone through thousands of years, and China modern family enterprise is just emerging, a journey of a thousand miles begins with a single step, Li, a good family constitution, is the cornerstone of family everlasting.