Auditing the Family Constitution – Way to Strengthen Compliance

India’s economy has a major contribution of family owned and run enterprises. Until a decade ago, family owned businesses were run by informal unwritten rules rooted in Indian culture and traditions. Then lately, pioneers like Burmans of Dabur, GMR Group and others, brought about a trend of creating family constitution which essentially laid down different rules for running the family and business in such a manner that both are preserved and strengthened. This concept of creating the family constitution in recent times has spread and scores of families have gone on this path.

However, like any other growing trend, creation of a family constitution also seems to have become a fad. The advocacy of the concept by some families who have reaped benefits out of creating their family constitutions seem to have somehow created the impression that creation of family constitution is a panacea to all the challenges in family and business. Just like making an architectural plan of the house is critical, the major part of the time and effort goes in actually building the same. Similarly creating a family constitution is like the blue print. A much larger effort is required in developing the required maturity and ability to live the same. The real journey is actually implementing it, as says Sumantra Ghoshal, “the key issue today is not of “knowledge” but of “implementation”. Living the philosophy is like a tapasya. It’s an entirely different ball game which will require unfaltering discipline, focus and will-power.

Now how does one enhance implementation of Constitution? We all know, what gets measured gets done. So, like a financial or operational audit, some families have resorted to doing annual audit of their Family Constitution. This is done for three dimensions viz ~ Individual happiness, Family togetherness and Business Robustness and Performance. Simple online tool for this has been developed which highlights the areas of high and low compliance. This can then become an aid in acknowledging people for progress being made as also identifying areas and actions for strengthening.

Thus, this annual audit can go a long way in enhancing individual happiness, strengthen bonds of togetherness and aid to robustness of business performance.