Family owned-businesses need mediation policy

Research has shown that many family disputes can be prevented and managed with proper grievance and dispute resolution policies. Many disputes can be successfully prevented if family members are given a chance to air out their grievances before the dispute escalates. This is especially so, for family owned businesses where there are many conflicting interests.

How do members of a family business handle the different interests between them? How do you ensure that they are satisfied with whatever decisions are made? Favouritsm is a big cause of disintegration of family owned businesses.

Family businesses frequently face unique challenges, in part because of the emotional ties and interpersonal interactions that often clash with the objectives of the business. This is why every family owned-business should have a dispute resolution policy to prevent costly litigation which can lead to the disintegration of family and business relationships.

A grievance and mediation policy is one in which members commit themselves to finding amicable ways of solving inter-personal and business disputes. A grievance and mediation policy that is well-written is necessary to handle disputes in a way that upholds relationships, fosters harmony, and guarantees business continuation.

Mediation is a form of alternative dispute resolution provided for under Article 159 of the Constitution of Kenya, 2010. It is a voluntary and confidential process in which a mediator, who is a neutral third party, assists the disputing parties in reaching an amicable solution. It is a process that seeks to expedite resolving of disputes while also maintaining high levels of confidentiality and relationships of the parties in dispute.

Mediation is therefore a preferred mechanism when it comes to solving family disputes because, at the heart of it, it seeks to ensure that family relationships are not broken.

Family businesses experience unique challenges and it would not be preferable to go to court to help solve some of the disputes. The benefits of family mediation and grievance policy are several.

It is cheaper compared to court litigation and mediation also helps the parties save time that would otherwise be spent on litigation. A well handled mediation can take a day to conclude if parties co-operate. Mediation is very confidential and therefore family business disputes will not be subject to public scrutiny. The biggest win for family mediation is that it enables the parties preserve their relationships and often leads to a win-win outcome.

A grievance policy on the other hand is one that helps family members handle grievances before they get worse. The policy ought to have a clear definition of what a grievance is and give a clear structure on how disputes can be reported in terms of to whom and the manner in which it is to be reported. It is important to have well set out timelines for dealing with grievances to ensure they are handled expeditiously.

It is important to keep proper records of grievances and their resolutions, making sure that there is accountability, and maintaining a history of actions for future reference.

Ms Mputhia is the founder of C Mputhia Advocates | [email protected]