Governance & Ethics
Family business governance is the set of structures, agreements, and practices that determine how a family makes decisions about its shared wealth, its enterprise, and itself. In Indian business families, these structures rarely exist in written form — and when they do, they often reflect legal compliance rather than how the family actually operates. The distance between the two is where most governance problems begin.
Most families at a certain level of wealth have sophisticated governance around their business — boards, compliance frameworks, statutory audits, legal counsel. What they rarely have is governance around the family itself: clear agreements on who decides what, how conflicts are resolved before they escalate, how the next generation enters (or does not enter) the enterprise, and what ethical principles guide the family’s conduct beyond what the law requires.
This is the work Vedicology Advisors does in governance. Not corporate compliance — there are chartered accountants and law firms who handle that well. The work here is on the family’s own operating system: the agreements, the forums, the charters, and the decision-making frameworks that hold a family enterprise together across generations.
The Challenge
Indian business families are among the most entrepreneurial in the world. They build enterprises of extraordinary scale and complexity, often across multiple sectors and geographies. But the governance structures that serve the business are almost never extended to the family itself.
The result is a pattern that repeats across generations. In the founder’s lifetime, governance is personal — the patriarch or matriarch makes decisions, and the family follows. It works because the founder’s authority is unquestioned. But when the founder steps back, or when the next generation enters the business, or when siblings inherit jointly, or when cousins begin to disagree about direction — there is no structure to absorb the tension. No written agreement on decision-making authority. No forum where difficult conversations can happen with rules of engagement. No charter that separates what the family owes the business from what the business owes the family.
The absence of family governance does not surface as a crisis immediately. It surfaces slowly — in avoidance, in resentment, in decisions deferred, in talented non-family managers leaving because the rules are unclear, and eventually in conflict that becomes public and damaging. By the time a family recognises the need for governance, the cost of not having it is already substantial.
Vedicology Advisors works with families before the crisis, during it, and after it — to build the governance infrastructure that the family needs to function as a cohesive unit across generations.
Family Constitutions and Charters
A family constitution is not a legal document. It is not filed with any regulator. It is an agreement — written, negotiated, and signed by the family — that articulates how the family governs itself in relation to its shared wealth and enterprise.
It addresses the questions that no company’s articles of association can answer: Who among the family can hold a management role, and what qualifications are required? How are family members compensated for their involvement — or for choosing not to be involved? What happens when a family member wants to exit their shareholding? How are disputes resolved before they reach a courtroom? What are the family’s stated values, and how do they influence business decisions?
The process of writing a family constitution is as important as the document itself. It requires the family to sit together and confront questions they have been avoiding — often for years, sometimes for decades. The conversations are difficult. They involve money, power, identity, fairness, and legacy. They surface assumptions that family members did not know they disagreed on.
Praveen Saanker facilitates this process from start to completion. The financial experience — over two decades at HSBC and ASK Wealth Advisors — means the wealth structures the family is governing are not abstract. The psychological training — a doctorate in clinical psychology — means the emotional dynamics underneath the negotiation are visible and addressed, not suppressed. The result is a constitution that the family has genuinely built together, not one drafted by a law firm and signed under duress.
Family Councils and Governance Forums
A family constitution without a forum to implement it is a document that sits in a drawer. The governance structure needs living institutions — regular forums where the family meets not as business operators but as a family with shared interests, shared wealth, and shared responsibility.
Family councils are the primary governance forum for most Indian business families. They are distinct from board meetings. A board meeting addresses the business. A family council addresses the family’s relationship to the business — and to each other. Succession planning, philanthropic direction, next-generation development, conflict resolution, and the family’s evolving relationship with its wealth are all council matters, not board matters.
The design of a family council matters more than its existence. How often does it meet? Who has a seat — and at what age does the next generation join? How are decisions made — by consensus, by vote, by the senior generation’s authority? What happens when a decision cannot be reached? Who facilitates? These structural choices determine whether the council becomes a functioning governance body or a formal ritual that no one takes seriously.
For larger families — those with multiple branches, diverse business interests, or family members spread across geographies — additional governance forums may be needed: a family investment committee, a philanthropic committee, or a next-generation forum that gives younger family members a structured space to develop their voice before they enter the main council.
Vedicology Advisors designs these structures with each family, facilitates the first several meetings, and provides ongoing advisory as the governance matures. The goal is a council that the family can run independently — because governance that depends on an external advisor has not yet become governance at all.
Decision-Making Frameworks
The most common governance failure in Indian family enterprises is not the absence of a constitution or a council. It is the absence of a clear, agreed-upon framework for how decisions are made.
In most families, decisions happen through one of three default mechanisms: the senior generation decides unilaterally, the family avoids the decision until circumstances force it, or the loudest voice prevails. None of these mechanisms scale. None of them survive a generational transition intact. And none of them address the reality that different categories of decisions — operational, strategic, financial, personal — may require different decision-making processes.
The governance work here involves designing decision-making frameworks that are explicit, agreed-upon, and documented. Which decisions does the business leadership make independently? Which require family council approval? Which are reserved for the senior generation, and for how long? How does the family handle a decision where the financial logic and the family’s values point in different directions?
This last question — what happens when profit and principle conflict — is where many Indian families want their governance to reflect something beyond commercial logic. Dharmic and ethical principles have shaped how Indian business families operate for generations, long before governance became a consulting category. Integrating these principles into formal governance structures — not as abstract value statements, but as operational decision-making criteria — is part of the work Vedicology Advisors does with families who want their governance to reflect what they believe, not just what the market demands.
Family and Non-Family Management
One of the most sensitive governance questions in any Indian family enterprise is the relationship between family members and professional managers. As businesses grow, they need professional leadership that the family may not be able to provide from within its own ranks. Bringing in non-family executives is a strategic necessity — but it introduces governance complexities that most families underestimate.
Non-family managers need clarity. They need to know who they report to, how their performance is evaluated, what authority they hold, and where the boundaries of their role end and family prerogative begins. Without this clarity, talented professionals leave — not because of compensation, but because they cannot operate effectively in an environment where unwritten family dynamics override the organisational structure.
On the family’s side, the challenge is different. How does the family trust someone outside the bloodline with decisions that affect the family’s wealth and legacy? How does it set compensation for non-family leadership that is fair but does not create resentment among family members who earn less? How does it handle the situation when a non-family CEO is more competent than the family member who expected the role?
These are governance questions, not HR questions. They require structures — clear role definitions, performance frameworks, succession criteria that apply equally to family and non-family candidates, and forums where professional managers can raise concerns without navigating family politics.
Praveen Saanker’s background across institutional finance and family advisory means this work is grounded in how both worlds actually operate. The advisory is practical: clear structures, documented agreements, and governance mechanisms that a professional management team can work within — not vague commitments to “professionalisation” that the family abandons at the first uncomfortable decision.
Governance That Reflects What the Family Believes
Governance in an Indian family enterprise is not a Western import to be applied wholesale. The best governance structures draw on the family’s own traditions, values, and sense of dharma — and express them in frameworks that are rigorous enough to withstand the pressures of growth, succession, and generational change.
The families Vedicology Advisors works with often want their governance to reflect principles that predate modern corporate governance theory. Stewardship rather than ownership. Duty to the enterprise and its people, not just returns. Ethical conduct that goes beyond legal compliance. A relationship with wealth that is grounded in purpose, not accumulation.
These are not soft aspirations. They are operational governance principles that, when embedded in constitutions, council charters, and decision-making frameworks, shape how a family enterprise actually behaves across decades. The work is to make them explicit, documented, and enforceable — so that they survive beyond the generation that articulated them.
Governance is not a one-time exercise. It evolves as the family evolves — as new generations enter, as the business changes, as the family’s relationship with its wealth shifts. Vedicology Advisors provides ongoing advisory to families whose governance structures need to mature alongside them.
| Governance begins with a conversation — about what the family has built, what it wants to protect, and what structures it needs to hold both together across generations. If your family is approaching a governance question it has not yet addressed, a confidential conversation is the first step. |