Vision and Mission Statements and Codes of Conduct
By Scott E. Friedman, Andrea H. Vossler, and Eliza P. Friedman
Guiding Principles, including vision/mission statements and codes of conduct, can help families in business together thoughtfully anticipate and address issues that inevitably arise.
A Vision and Mission Statement:
A vision statement is an articulation of what an ideal (realistically achievable) future for the family business looks like. A shared vision helps bond organizational members together through a common desired future, directing organizational energy in a positive manner that can help inspire an organization to improve performance, provide direction to strategic planning, and motivate employees. Through the effort of clarifying and committing to a shared vision, families can achieve a clearer level of consensus that helps unite them in the pursuit of exciting future goals, thereby helping reduce the likelihood of debilitating conflict in the future.
A shared vision can be particularly important in a family business context, and studies have found having one to be an important factor in the determining the continued success of a family business from one generation to the next.Interestingly, the study also found a strong correlation between positive work culture and the creation of a shared vision, concluding that family business owners “would be wise to spend as much time fostering a positive family climate . . . as they do on creating and executing a successful business strategy if their goal is to pass the business from one generation of family owners to the next.”To help insure that a vision statement is realistic, it is often framed around what the business hopes to accomplish in increments of five to ten years.
Families also benefit from separately articulating their core purpose which is designed in order to help distinguish that which is important to focus on (“mission critical”) from that which is not and, in so doing, serve as another “decision-making compass.” Mission statements generally describe the business’ target customers, the products or services that will be offered, and in which markets, and what makes the company’s products or services unique. Unlike core values, which are intended to be relatively fixed over time, missions are intended to change as new products and services are integrated into the business. As a result, family businesses are well served by reconsidering their mission, from time to time, to insure its continuing relevance.
A Code of Conduct:
A family code of conduct is intended to help insure civility, collegiality, and nurture relationships and to reinforce trust within the family and its business by setting standards and/or providing guidance on how family members treat one another, interact with company management, and conduct themselves publicly. While families are well served by developing, together, their own code that is relevant and authentic, such codes often include provisions that restrict “bad mouthing” or “tattling” on each other to third parties, promote honesty and mutual respect, and provide guidance on what type of information should be kept confidential, discussed with family members only or disclosed to others. In addition, a code of conduct can be helpful in encouraging family members to support and collaborate with one another, as well as provide guidance on how to respectfully and professionally handle disagreements with one another (e.g., behind “closed doors,” after a “cooling off” period, etc.). Some families may also benefit from including provisions in their codes of conduct that clarify how media relations will be handled (e.g., agreeing who will be the “point person”), outline expected work habits, recommend appropriate dress code and provide parameters around inter-office romance.
Did you like our blog and want to learn more? Join us on October 30 for our Family Business Seminar for a unique experience that will give you the tools to improve your family business. Seats are limited, so get your tickets today!
 John E. Neff, Shared Vision Promotes Family Firm Performance, Frontiers in Psychol., May 2015, at 1, 5.
 For example, results from a quantitative study of 100 next-generation family firm leaders and 350 family and non-family leaders and employees found a positive correlation between the development of a shared vision and effective next-generation leaders, which, in turn, increased the “multigenerational survival rate” of family-owned businesses. Stephen P. Miller, Next-Generation Leadership Development in Family Businesses: The Critical Roles of Shared Vision and Family Climate, Frontiers in Psychol., Dec. 2014, at 1, 10; see also UNC Kenan-Flagler Business School, The Importance of Shared Vision in a Family Business, YouTube (Sept. 10, 2015), https://youtu.be/ienfwTuKSv0
 Miller, supra , at 1.
 The mission statement should guide the actions of an organization, spell out its overall goal, and provide a strategic framework for the company. See generally, e.g., Jeffrey Abrahams, The Mission Statement Book: 301 Corporate Mission Statements from America’s Top Companies (1995); Linda C. McCLain, Family Constitutions and the (New) Constitution of the Family, 75 Fordham L.R. 833 (2006).
 Numerous authorities advocate the adoption of ethical and behavioral codes of conduct. See, e.g., Wendy Plant et al., Ethical Practices and Regulatory Context of Family Businesses, J. Acad. & Bus. Ethics, Oct. 2009, at 1, 2 (“There are good business and family reasons for codes of ethics . . . .”); see also Gwen Moran, How Sargento Foods Creates Principled Profit, Fam. Bus. Mag. (Oct. 1, 2015), https://www.familybusinessmagazine.com/sites/default/files/articles/2015/10/01/valuese3852.html.