Techniques to help fix family feuds

A NEW way of resolving disputes is being created to handle family business tussles.

Traditional means such as arbitration and mediation have proved unsuccessful because they tend to miss all of the “invisible” participants in family businesses – the spouses of the main protagonists.

These invisible participants can have a major role in blocking any attempts to solve family disputes.

Spencer & Co partner Jon Kenfield said beyond the first stage of diagnosing what the family business problem was, no one method could be guaranteed to provide a solution.

“We try to find out what the problem is and what the needs of the parties are,” Mr Kenfield said.

“The most important thing is keeping the family together. After that we try to keep the business together because that supports the family.”

Mr Kenfield said the rigid structure of mediation often failed to provide a satisfactory solution in family business disputes. And legal means were probably worse.

“We have a panel of retired judges and put the parties in front of one of them. This usually puts any inflated legal issues back in their box fairly quickly,” he said.

“Once the legal side is in perspective we can move on to solving the problem.”

Mr Kenfield said one of the tricks to solving a dispute was to work with the business’ professional advisors.

“If you have professional advisors that have been working with the family for 20 or 25 years, they know the business inside out,” he said.

“They can also give you some ideas as to who are the blockers in the dispute.”

Mr Kenfield said a lot of family business disputes happened because there was no common vision.

“You have to make sure you have everyone facing the same direction,” he said.

Despite his approach, Mr Kenfield said there were times when he had to concede that there was no chance of solving a dispute collaboratively.

“Sometimes you have to organise an exit strategy for one or more family members,” he said.

“Hopefully, after some time, the family members will be able to talk to each other again.

“The problems that come up in family businesses often boil down to who poisoned whose goldfish at the age of six.

“They are usually jealousy issues, succession issues and generational issues.”

Certified Practising Accountants Australia has its own approach to solving family business disputes – put in place proper frameworks to avoid issues coming to a head.

CPA Australia business policy advisor Judy Hartcher said succession planning was one of the big issues.

“Our research shows only 30 per cent of family businesses plan for succession,” Ms Hartcher said.

“These businesses are often informally arranged. Putting in a proper framework can help avoid disputes.”

There are about 60,000 family businesses in WA.

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