Metalmex Case: Institutionalization

Topics: Management, Board of directors, Corporation Pages: 2 (456 words) Published: April 1, 2013
Metalmex Case: Institutionalization

* Existence of Institutions:
Metalmex doesn’t have any internal relationship management structures. It would be important for Metalmex to create some internal institutions to both favor the unity and regulate the relationship between family members and the firm. The company is growing and consequently the establishment of new instruments is recommended. Taking into consideration that Metalmex is a family business, in order to build and secure structured decision-making processes across the organization and avoid future potential instability it is necessary to establish a Family Council as well as a Board of Directors.

* Family Council Effectiveness
It is important for Metalmex to establish effective family governance in order to remain sustainable across the generations, as complexity is increasing. A family council will provide a structured and concrete way for the family members to achieve both the family and company’s objectives. The family council will be in charge of transmitting their main values (honesty, trust, reliability and discretion) to build cohesion. It will also create clear guidelines concerning the adopted strategy and will provide information to the rest of the family members that aren’t working in the company about the situation of the company. Moreover the council will decide over dividend policies and criteria of employability of family members and their salaries. Also it should decide on the mandates regarding leadership of the company and the person which these mandates should be assigned to. An important tool for this council should be a family constitution. (Who should be included?)?????????????????????????

* Board of Directors Effectiveness
After establishing the Family Council, a structured committee must be introduced that focuses explicitly on business topics. More specifically, the Board of Directors will take on responsibilities regarding the support and monitoring of the...
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