We recently celebrated Halloween – that time of year when all of the scary creatures and goblins get to come out and play. And even though all of those frightful monsters are now tucked away for another year, unfortunately some haunting skeletons are still lurking around. But we’re not talking about Halloween skeletons; we’re talking about those lurking in your family business closets.
Every family business has experienced challenges, failures, conflicts and/or addictions that have been swept under the rug. When those skeletons are exposed, as they often are, they will negatively impact the family business.
You don’t have to look far, or dig deep, to see that family businesses that try to lock away their skeletons eventually become victims of their own scandals. Take for example Bernard L. Madoff Investment Securities. Bernard founded his Wall Street firm in 1960, and by 2008 his company was estimated in the billions. Unfortunately, that same year, Madoff admitted that the wealth management division of his company was nothing more than an elaborate Ponzi scheme.
Today, Bernard is serving a 150 year sentence. His brother, who served as Senior Managing Director and Chief Compliance Officer was sentenced to 10 years in prison. His son Mark, who spent most of his career at the family company, committed suicide two years after his father’s arrest.Both he and his brother Andrew, who passed away of cancer, were the constant target of civil lawsuits and public scrutiny until their deaths.
While not all skeletons will inflict as much damage to a family business as that of the Madoff’s – it’s never a good policy to hide misconduct, addiction or scandals within a family business. While it’s not an easy path, we recommend your family create a list of core values that will help your family business thrive and grow in a positive environment. Ensuring that you have a well-defined set of core values is critical to your success – and sustaining your legacy.
If your business is struggling with skeletons in the closet, our team can help you get rid of them. Whether we help you define – or follow – your founding principles, or if you want to bury the skeletons once and for all, we can help – we’ve seen it all.
