A family-owned business brings with it a unique set of issues and complicated family dynamics can often result in major difficulties. Sports franchises are not immune. As the NBA playoffs continue (Go Rockets!), the family that owns the Los Angeles Lakers is in the news but not for basketball.
The Buss family trusts own 66% of the Lakers and can elect three of the board’s five members, with the caveat that the Buss siblings should make all efforts to ensure that Jeanie Buss remains controlling owner. As controlling owner, Ms. Buss recently made some changes, including the removal of her brother, Jim Buss, as Vice President of Basketball Operations. This decision, as reported in the press, led Jim Buss to attempt to take over. The dispute quickly moved to court. In the end, Jeanie Buss prevailed, and Jim Buss lost his spot as a V.P. and as co-trustee.
The Buss feud highlights the complexity of family relationships and the impact that family disputes can have when they make their way into the boardroom. While there is no way to completely prevent a family dispute, there are steps you can take to make sure that a family feud doesn’t shut down your family-owned business.
- Create clearly defined roles and division of responsibilities. In a family-owned business, it is important to make sure that everyone in the family knows their role and what they are responsible for within the organization. Be as specific as possible so that you are less likely to fight over who is responsible for what.
- Outline a decision-making process. It is not easy for any business partners to agree on every decision that must be made, and a family business is no exception. There should be a specific process that is outlined from the start and followed consistently for business-related decisions.
- Put together an exit plan. It is important to plan for the end at the beginning. By creating an exit plan upfront, you can avoid a legal battle down the road should a family member decide to leave the business. Consider a variety of situations that might occur, and create a plan for each one.
One family feud can destroy a business that a family has worked to build over decades, but it doesn’t have to. By preparing and planning up front, you can help to protect your family-owned business when disputes arise.