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1、November 2024The crucial role of family governance frameworks in Indian family businessesEmpowering legacy:Importance of family businesses in IndiaFamily businesses are the backbone of the Indian economy,contributing significantly to job creation,innovation and economic growth.They are deeply rooted

2、 in their communities,serving as vital lifelines in both rural and urban areas.Their long-term perspective,trusted relationships,stable leadership,commitment to values,receptiveness to new technologies,forging of new partnerships and alliances,and access to sustained capital are key drivers of natio

3、n-building.2|PwC Empowering legacy:The crucial role of family governance frameworks in Indian family businesses3|PwC Empowering legacy:The crucial role of family governance frameworks in Indian family businessesWhy are family businesses unable to survive beyond the third generation?Despite their sig

4、nificant contributions,family businesses face several challenges as they have to balance both the emotional needs of the family members and rational needs of the business.These challenges get aggravated during inter-generational transitions and impact the longevity of the business.As per PwC,only 63

5、%of Indian family business leaders say they have formal governance structures in place,including shareholder agreements,family constitutions and protocols,and even wills.1Key issues include:Inability to adapt:Many family businesses struggle to keep pace with the rapidly evolving business environment

6、.This failure to adapt can lead to a decline in market position.Even once-dominant companies fail to keep pace with the fast-changing technology landscape and shifting consumer needs,leading to significant erosion of their market position.Succession planning:Despite the fact that 9 out of 10 publicl