“We do not inherit the Earth from our ancestors, we borrow it from our children.”
A family charter or a family protocol document, also known as the family constitution, encapsulates a set of principles which seek to reflect the values of the family and regulate its relationship with the business. Clearly, this is not an easy task. The family charter is not a legal document; it sets out morally binding statements, which the family has agreed upon and accepted. Some but not all statements may, if the family should so choose, be converted into legal obligations. Some families choose to have the family charter notarised, while others have family members swear under oath that they will abide by its terms. There have also been cases where ceremonies are organised for a family member, when they reach legal age, to repeat the process and reaffirm the importance of the family charter. In the following analysis, Niall O’Toole, Partner, and Prarthna Chadda, Senior Associate at Clyde and Co. explore the process of building a family charter and examines the case of a Gulf family business as a correlating model.