Family charter
A family charter is a written statement of a business-owning family's shared values, purpose and principles for how family members relate to the business, sometimes used as another name for a family constitution.
A family charter puts in writing what a family believes about its business and how it intends to own it together. Families use the term in two ways. For some, it is simply another name for the family constitution. For others, it is a shorter document, often a few pages, that sets out values, purpose and broad principles, with detailed rules kept elsewhere.
A family charter usually contains:
- Purpose: why the family wants to keep owning the business.
- Values: what the family stands for, in business and with each other.
- Principles: broad commitments on topics such as family employment, communication and how decisions are made.
- Governance outline: which bodies exist, such as a family council, and what they are for.
Like most family governance documents, a family charter is usually not legally binding in itself. Binding commitments belong in legal agreements drafted with the family’s lawyer.
Family charter or handover charter?
The names are similar but the documents do different jobs. A family charter speaks for the whole family over the long term. A handover charter is a short agreement between the leader handing over and the successor, setting out which decisions move, when, how they will disagree, and how the change is announced. What is a family charter? covers the family document in more depth.
Why it matters for the successor
A family charter gives the successor something to lead from. When a successor can speak about the family’s purpose in their own words, rather than quoting the founder, the family and the company hear continuity and a new chapter at the same time. It also gives the successor a shared reference point when difficult family governance questions come up.