CMA Final Law Corporate Governance

Most Important/
Repeated/Expected Questions

Common Questions for both syllabus

Question 1

The leadership team of a company is confused on the point whether it is wise for any
company to practice good governance which comes with additional cost. Please advise
the company with your comprehensive answer quoting appropriate examples and the
relevant provisions of law.
Answer:

Governance means the process by which the affairs of the company is managed with regards to
fairness, honesty and good practices for the benefit of all stakeholders. This is to be done with
systematic policies and procedures balancing the interest of various stakeholders.
Therefore, in order to qualify as good governed company, a company has to put in place the
mechanics of the functioning of the company with checks and balances between the
shareholders, directors, auditors etc. The process of Corporate Governance is more a way of
business life than a mere legal compulsion. Moreover, there should be uniformity in governance,
so that stakeholders can compare between the companies.

Good Governance has a lot of benefits as enumerated under:

✓ Better governed company is essential for growth and stabilization
✓ Reputation of the company will enhance one people know that you are a honest or good
governed company.
✓ Better use of funds of the company, which may be fines collected from public of the
company by the managers.
✓ Better management of resources which are available to the company.
✓ Better governed ensures long term and steady growth.
✓ Establishing stakeholders’ confidence
✓ Leverage of competitive advantages
✓ Alliances with other companies are easy as others are interested to be associated with
your company.

Narayan Murthy Committee stated:

“CG is the acceptance of the non-alienable rights of the shareholders as true owners of the
corporation and their own role as trustees. It is about commitment of values, ethical business
conduct and differentiating between personal and corporate fund”.

From the typical concept of profit being the essence of business, stakeholder definition includes
not only the shareholder but the employees, society, Govt., Customers, creditors, financiers etc.

Considering the changing concept and added benefits of Corporate Governance, it must be made
mandatory and uniform. It should be adopted by companies even if comes at an additional cost.

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Corporate Governance Questions 2
Question 2

A company opens a hospital for the benefit of its employees and contends it as a CSR
activity. Comment. Can CSR have a different meaning to different stakeholders?
Answer:

Following Activities are not to be considered as CSR Activities according to The Companies (CSR
Policy) Rules, 2014:
✓ The CSR projects or programs or activities undertaken outside India.
✓ The CSR projects or programs or activities that benefit only the employees of the
company and their families.
✓ Contribution of any amount directly or indirectly to any political party under section
182 of the Act.
✓ Expenses incurred by companies for the fulfillment of any Act/Statute of regulations
(such as Labour Laws, Land Acquisition Act etc.) would not count as CSR expenditure
under the Companies Act.
Hence, it is not CSR activity.
Furthermore, CSR can mean different things to different people:
• for an employee it can mean fair wages, no discrimination, acceptable working
conditions etc.
• for a shareholder it can mean making responsible and transparent decisions regarding
the use of capital.
• for suppliers it can mean receiving payment on time.
• for customers it can mean delivery on time, etc.
• for local communities and authorities it can mean taking measures to protect the
environment from pollution.
• for non-governmental organisations and pressure groups it can mean disclosing
business practices and performance on issues ranging from energy conservation and
global warming to human rights and animal rights, from protection of the rainforests
and endangered species to child and forced labour, etc.

For a company, however, it can simply be seen as responding to the needs and concerns of
people who can influence the success of the company and/or whom the company can Impact
through its business activities, processes and products.

Question 3

The National Guidelines on Responsible Business Conduct comprises nine thematic

pillars of business responsibility that are known Principles. Enumerate.
Answer:

✓ Principle 1: Businesses should conduct and govern themselves with integrity and in a
manner that is ethical, transparent and accountable. The principle ensures ethical
behaviour in all operation, functions and processes, is the basic of businesses that are
guiding their governance of economic, social and environmental responsibilities.
✓ Principle 2: Businesses should provide goods and service in a manner that is sustainable
and safe. The principle emphasises that businesses have to focus on safety and resource-
efficiency in the design and manufacture of their products. These products have to be
manufactured in such a way, by which it creates value by minimising and mitigating its
adverse impacts in the environment and society through all stages of its life cycle, from
design to final disposal. This principle encourages businesses to understand every
material sustainability issues across their product life cycle and value chain.
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Corporate Governance Questions 3
✓ Principle 3: Businesses should respect and promote the well-being of all employees,
including those in their value chains. The principle encloses all policies and practises
that are about the equity, dignity and well-being and the provision of decent work, for
every employee that who are engaged within a business or in its value chain, without
any discrimination and in a way that contributes to the diversity. The principle identifies
the well-being of an employee and the welfare of his/ her family.
✓ Principle 4: Businesses should respect the interests of and be responsive to all its
stakeholders. This principle recognises the businesses operate in an eco-system that
consists of some stakeholders, being shareholders and investors and their activities
affect natural resources, habitats, communities and the environment. The principle
brings into light that businesses have a responsibility to maximise the positive effects
and minimise and mitigate the negative impacts of the products, operations and
practises on their stakeholders.
✓ Principle 5: Businesses should respect and promote human rights. This principle
identifies the human rights are rights that have to be inherent to all human beings and
these guidelines are applied without discrimination. These human rights are considered
to be inherent, inalienable, interrelated, interdependent and indivisible. This principle is
inspired, informed and guided by the Constitution of India and the International Bill of
Rights, and recognises the primacy of the State’s duty to protect and fulfil human rights.
✓ Principle 6: Businesses should respect and make efforts to protect and restore the
environment. This principle gives preference to environmental issues that are
interconnected at the local, regional and global levels doing businesses to address the
problems like pollution, biodiversity conservation, sustainable use of natural resources
and climate change in a comprehensive and systematic manner. The principle
encourages firms to adopt environmental practises and processes that minimise or
eliminates the harmful effects of their operations across the value chain. Moreover, it
also persuades businesses to follow the Precautionary Principle in all its actions.
✓ Principle 7: Businesses, when engaging in influencing public and regulatory policy,
should do so in a manner that is responsible and transparent. This principle concedes
that businesses operate within a specified national and international legislative and
policy frameworks that guide their growth and also provides specific restrictions and
boundaries. The principle recognises the legitimacy of businesses to engage with
governments for redressal of a grievance or for influencing public policy. In addition to
this, the law demands that public policy advocacy has to expand public good.
✓ Principle 8: Businesses should promote inclusive growth and equitable development.
The principle rests the challenges of the social and economic development that are faced
by the country and enhances the national and development agenda according to the
government policies and priorities. The principle mentioned the need for collaboration
amongst businesses, government agencies and civil society in this development agenda.
✓ Principle 9: Businesses should engage with and provide value to their consumers in a
responsible manner. The principle is based on the fact consumers that are safe to use,
creating value for both. It recognises consumers having freedom of choice for the usage
of goods and services, and the enterprises strive to provide the products that are safe.

Question 4

CSR and Sustainability go hand in hand. Comment

Answer:

Sustainability (Corporate Sustainability) is derived from the concept of sustainable

development which is defined as "development that meets the needs of the present without
compromising the ability of future generations to meet their own needs".
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Corporate Governance Questions 4
In other words, it means making decisions that benefit the planet and future generations while
still being profitable and beneficial for society. By prioritizing sustainability, businesses can
make a positive impact on the world and their bottom line i.e. Planet, Profit, People.

CSR is closely linked with the principles of Sustainable Development, which argues that
enterprises should make decisions based not only on financial factors such as profits or
dividends, but also based on the immediate and long-term social and environmental
consequences of their activities, especially taking into consideration the needs of future
generations.
CSR in India tends to focus on what is done with profits after they are made.
On the other hand, sustainability is about factoring the social and environmental impacts of
conducting business, that is, how profits are made.

CSR goes hand in hand with environmental, social, and governance (ESG) metrics that help
external analysts quantify the company’s social efforts, and becomes a key factor for investors’
consideration and continued interest.

Corporates doing something for the society is not new. There are many companies used to run
school, medical units, roads, sanitation etc. They used to do these voluntarily, since there was no
law for mandatory CSR.
The Ministry of Corporate Affairs (MCA), Government of India, released a set of guidelines in
2011 called the National Voluntary Guidelines on the Social, Environmental and Economic
Responsibilities of Business (NVGs). After, revision and updation, the new principles are called
the National Guidelines on Responsible Business Conduct (NGRBC)
It requires companies to undertake Corporate Social Responsibility (CSR) initiatives in
communities, and has since, provided additional rules and guidance on the areas and target
groups of such interventions in consistency with national socio-economic priorities.
It can be said that CSR and sustainability is a company's commitment to its stakeholders to
conduct business in an economically, socially and environmentally, sustainable manner that is
transparent and ethical."

Question 5

Explain how the provisions of the Companies Act, 2013 relating to Audit Committee will
help in achieving some of the objectives of Corporate Governance.
Answer:
Companies, particularly public listed companies raise huge amounts of monies from the
members of the public and public financial institutions. They owe it to all the vast number of
persons and institutions who have reposed their faith in them

In order to achieve highest quality of corporate governance in the conduct of affairs of such
companies, the provisions of the Companies Act, 2013 in respect of Audit Committees have been
framed under Section 177 of the Act and highlighted as under:

✓ The constitution of Audit Committees requires the majority representation from

independent directors.
✓ It further requires the majority of members and the chairperson of the Audit
Committees to be persons who can understand financial statements. This enables a
meaningful exercise of the committee's functions by knowledgeable persons thereby
increasing the effectiveness of such committees.
✓ Scope of work of an Audit Committee has been laid down in the act itself. By doing this
the vagueness and doubt in the role and functions of such committees has been
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Corporate Governance Questions 5
removed.
✓ The Audit Committee shall have authority to investigate, into any matter in relation to
the areas of its scope of functioning or referred to it by the Board and for this shall have
power to obtain professional advice from external sources and have full, access to
information contained in the records of the company. This provides the Audit
Committee to function with a high degree of effectiveness by accessing external
professional advice and the records of the company.
✓ The recommendations of the Audit Committee are binding on the Board to take
appropriate corrective actions. In case the Board of Director refuses to accept the
recommendations of the Audit Committee, it bound to disclose the same with the
reasons for non acceptance in Board’s Report.
It will be seen from the above provisions of the Companies Act, 2013 that efforts have been
made to make such committees more impartial, effective and accountable which will enable the
company to improve the quality of its corporate governance thereby improving accountability
and avoiding financial impropriety.

2016 Syllabus Exclusive Questions (Not to be read by 2022 Syllabus Students)

Question 6:

Explain the governance issues in Family Owned Businesses.

Answer:
Governance issues are as under:
✓ Role of BOD: Family directors who are also managers in the business would naturally
encourage reinvesting profits in the company so as to increase its growth potential. On
the contrary, family directors who do not work in the business would rather make the
decision of distributing the profits as dividends to family shareholders
✓ Role of the CEO: When the CEO is a family member; this becomes quite difficult and
awkward which can create further unsuitable problems for management and as a whole
business.
✓ Succession Plan: A change of guard or succession is a complex and stressful event for
any business and in the case of family businesses it gets extra complicated.
✓ Internal Control Formation: Since many families Controlled businesses are managed by
the founders or their children, environment is largely customized to their needs. This
space is a crucial spot of concern for external investors for their decision making and
long term survival.
✓ Innovation: Innovation is an essential requirement to survive and thrive. According to
the surveys conducted recently reveals that the family businesses in India view the need
to continually innovate as a key challenge over the next five years.
✓ Retaining Talent: This is important for any organisation. Family businesses believe that
attracting the right talent and then retaining it is a challenge that will have to be faced in
the medium term.
✓ Challenges with Internationalisation: Family businesses consider Exchange rate
fluctuations, understanding local regulations etc. as challenge while conducting
international operations

Question 7:

Explain the MoU mechanism in the State Owned Business Enterprises.

Answer:
In India the Memorandum of Understanding is a negotiated document between the Government,
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Corporate Governance Questions 6
acting as the owner of Public Sector Enterprise (PSE) and a specific PSE. It should contain the
intentions, obligations and mutual responsibilities of the Government and the PSE.

✓ The process of finalizing the MoUs starts with the issue of detailed Guidelines by the
Department of Public Enterprises (DPE) on the basis of which the State Enterprises
submit their draft MoU after getting them approved by the respective Boards and the
Administrative Ministries.
✓ These draft MoUs are then discussed, improved and finalized during the MoU
negotiation meetings of the Task Force Syndicates.
✓ Task Force examine the design of MOU at the beginning of the year. For this purpose the
draft MOU agreed upon by the PSE and the relevant Administrative Ministry is examined
by the Task Force. If Task Force has any comments or questions regarding the draft
MOUs, they seek clarifications via MOU Division. Once the signatories to MOUs have
responded to the concerns expressed by the Task Force on their draft MOUs, the MOU
negotiation meetings are organized.
✓ The High Power Committee (HPC) is the Apex Committee and is responsible for
Performance evaluation at the end of the year.
✓ This indicates the extent to which the mutually agreed targets between the CPSEs and
the administrative ministries were achieved.
✓ The functions of this committee are to review the draft MOUs before the final draft is
signed and to make an end-of-the-year evaluation to judge how far the commitments
made by both parties of the MOU have been met.
✓ The HPC and Task Force are assisted by the MOU Division in the Department of Public
Enterprises.

Question 8:

State the OECD Principles of Corporate Governance.

The OECD Guidelines on Corporate Governance of State-Owned Enterprises (the Guidelines) are
recommendations to governments on how to ensure that SOEs operate efficiently, transparently
and in an accountable manner.
OECD principles have been devised with four fundamental concepts in mind: responsibility,
accountability, fairness and transparency and enabling diversity of rules and regulations.

The OECD guidelines focused on the following areas:

✓ Rationales for State Ownership
The state exercises the ownership of SOEs in the interest of the general public. It should
carefully evaluate and disclose the objectives that justify state ownership and subject
these to a recurrent review.
✓ The State's Role as an Owner
The state should act as an informed and active owner, ensuring that the governance of
SOEs is carried out in a transparent and accountable manner, with a high degree of
professionalism and effectiveness.
✓ State-Owned Enterprises in the Marketplace
Consistent with the rationale for state ownership, the legal and regulatory framework
for SOEs should ensure a level playing field and fair competition in the marketplace
when SOEs undertake economic activities.
✓ Equitable Treatment of Shareholders and other Investors
Where SOEs are listed or otherwise include non-state investors among their owners, the
state and the enterprises should recognise the rights of a!! shareholders and ensure
shareholders'- equitable treatment and equal access to corporate information.
✓ Stakeholder Relations and Responsible Business
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Corporate Governance Questions 7
The state ownership policy should fully recognise SOEs’ responsibilities towards
stakeholders and request that SOEs report on their relations with stakeholders. It
should make clear any expectations the state has in respect of responsible business
conduct by SOEs.
✓ Disclosure and Transparency
State-owned enterprises should observe high standards of transparency and be subject
to the same high quality accounting, disclosure, compliance and auditing standards as
listed companies.
✓ The Responsibilities of the Boards of State-Owned Enterprises
The boards of SOEs should have the necessary authority, competencies and objectivity
to carry out their functions of strategic guidance and monitoring of management. They
should act with integrity and be held accountable for their actions.

Question 9:

Write short Notes on the following:

a) Disadvantage of the Family Businesses over Non-Family Businesses
b) Objectives of MoU System
c) Guidance on implementation of principles and Core Elements. (National Voluntary
Guidelines 2011)
d) Responsibilities of State Owned Enterprises
Answer (a)
Disadvantages of the Family Businesses over Non-Family Businesses
✓ Staff recruitment: External talent can be reluctant to join the family businesses as they
would not enjoy the same freedom that the other businesses offer.
✓ Raising funds for growth: Access to capital is required to grow and evolve. However, it is
difficult to raise the required funds for the family businesses than non-family
businesses.
✓ Family conflicts: Conflict among the family members is the major setback for the family
businesses.
✓ Ownership vs. Management: Separating the ownership from the management and
reaching a consensus on the roles of family members in the business are two important
issues for the family businesses to address.
Answer (b)
The specific objectives of the MoU system are to:
✓ Improve the performance of CPSEs though increased management autonomy.
✓ Remove the haziness in goals and objectives.
✓ Evaluate management performance through objective criteria; and
✓ Provide incentives for better future performance.
Answer (c)
Guidance on Implementation of Principles and Core Elements
Successful implementation of the Principles and Core elements require that all of them need to
be integrated and embedded in the core business processes of an enterprise. This requires,
specifically that the following actions are taken:
(a) Leadership: The Chairman/CEO/Owner/Manager should play a proactive role in
convincing the board/Top Management and staff within the business that adopting
these principles is crucial-for success. The board and senior management need to
ensure that the principles are fully understood across the organization and
comprehensively executed.
(b) Integration: These principles and core elements must be embedded in the Business
policies and strategies emanating from the core business purpose of. the organization.
For this to happen, these must align with each businesses internal values and/or must
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Corporate Governance Questions 8
provide clear business benefits.
(c) Engagement: Building strong relationships and engaging with stakeholders on a
consistent, continuous basis is crucial.
(d) Reporting: Implementation process includes disclosure by companies of their impact on
society an environment to their stakeholders.
Answer (d)
✓ The boards of the state owned enterprises should have the necessary authority,
competencies, and objectivity to carry out their function of strategic guidance and
monitoring of management.
✓ They should act with integrity and be held accountable for their actions
✓ The board should be fully accountable to the owners, act in the best interest of the
company, and treat all shareholders equally.
✓ SOE boards should carry out their functions of monitoring of management and strategic
guidance, subject to the objectives set by the government and the ownership entity.
✓ They should have the power to appoint and remove the CEO.
✓ The boards of SOEs should be so composed that they can exercise objective and
independent judgment. Good practice calls for the chair to be separate from the CEO.
✓ SOE boards should carry out an annual evaluation to appraise their performance.

Question 1 0:

What are the Benefits of CSR programme

Answer:
As the business environment gets increasingly complex and stakeholders become vocal about
their expectations, good CSR practices can only bring in greater benefits, some of which are as
follows:
(a) Communities provide the licence to operate: Apart from internal drivers such as
values and ethos, some of the key stakeholders that influence corporate behaviour
include governments (through laws and regulations), investors and customers. In India,
a fourth and increasingly important stakeholder -is the community and many companies
have started realising that the 'licence to operate' is no longer given by governments
alone, but communities that are impacted by a-company's business operations. Thus, a
robust CSR programme that meets the-aspirations of these, communities not only
provides them with the licence to operate, but also to maintain the licence, thereby
precluding the 'trust deficit'.
(b) Attracting and retaining employees: Several human resource studies have linked a
company's ability to attract, retain and motivate employees with their CSR
commitments. Interventions that encourage and enable employees to participate are
shown to increase employee' morale and a sense of belonging to the company
(c) Communities as suppliers: There are certain innovative CSR initiatives emerging
wherein companies have invested in enhancing community livelihood by incorporating
them into their supply chain. This has benefitted communities and increased their
income levels, while providing these companies with an additional and secure supply
chain.
(d) Enhancing corporate reputation: The traditional benefit of generating goodwill, creating
a positive image and branding benefits continue to exist for companies that operate
effective CSR programmes. This allows companies to position themselves as responsible
corporate citizens.

2022 Syllabus Exclusive Questions (Not to be read by 2016 Syllabus Students)

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Corporate Governance Questions 9
Question 6:

Discuss about the issues in family managed companies.

Answer:
Emerging issues in CG in family managed companies in India and how they are addressed.
✓ Separation of ownership and management: In few companies in India, the main
promoter or owner have chosen to be investor and not to a part of management even as
part time chairman. The whole Board of directors are non owners and are hard core
professionals.
✓ Family members acquiring professional courses from reputed institutes.
✓ Promoters are encouraging professionals in the organisation.
✓ Promoters are more focused on compliances to avoid loss of reputation which may
result to price fall in the share market.
✓ Role and leadership clarity decided at board level
✓ Owners are accepting and honouring opinion of managers.
✓ Family’s social and emotional issues are being satisfied by forming trusts/foundations
which are separate from the business entity, without any conflict of interest.

Question 7:

Corporate Governance is equivalent to Management. Comment

Answer:
Corporate Governance flows from Top to bottom and Management is responsible for the same.
Few thin line differences may be made out between the two.
Management Corporate Governance
Objects and targets are considered as The method of governance with ethical values
foundation
Applies at all levels Applies at top level
Emerges with situation. In every situation Need to study and experience
management strategies are to be decided and
implemented.
Regulations not important. Organisation can Regulations are important
have its own rules. However, rules of law have
to be followed.
Results are more important than the Methodology of achieving results are more
methodology of achieving the result important than results

Question 8:

Write a short Note on:

a) Theories of Corporate Governance through Board Management?
b) Steps in CSR Implementation Process
c) Disadvantages of Direct and Third Party Implementation
Answer (a)
✓ Stewardship theory: Directors are regarded as stewards of the company’s assets. They
decide that is to be done and drive the people of the company
✓ Agency theory: directors are considered to be agents of the shareholders and are
supposed to run the company for best interest of the shareholders
✓ Stakeholder theory: This theory considers wide inclusion of stakeholders, other than
shareholders. Hence the directors need to keep a balance between the interests of
various stakeholders.
✓ Trusteeship theory: The directors are the persons who are given the authority to run the
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Corporate Governance Questions 10
business by the shareholders which may be a huge amount of money. The relationship of
trust is very important for performance by directors who take major decisions of the
company.
Answer (b)
✓ Determining thrust area: an area has to be selected out of a broad list so that the domain
experience by the company which will help in better service. Thrust area is not a pre
requisite and company can spend money in diverse areas but this will narrow down the
targets.
✓ Identification of project: once the company has decided an area of work, it has to
identify the project.
✓ Evaluation of CSR projects: It can be in two phases;
o Evaluation before making the expenditure :
o Evaluation after making the expenditure
✓ Implementation of the CSR projects: Implementation may be done directly or through
Third party agencies like Mahila Mandals.
✓ Monitoring: Should be done periodically and data collection of the performance is a part
of it.
✓ Impact Assessment: Impact refers to success of the activity with relation to the target
beneficiaries. In order to know the impact, an impact analysis study is supposed to be
made, which would compare the achieved results with the desired result.
Answer (c)
Disadvantages of direct implementation by the company
✓ Manpower involvement
✓ Lack of domain knowledge
✓ No 80 G benefit
✓ Biased
✓ Corrective action not clearly defined
✓ Negative points remain undocumented.
✓ Lack of local area knowledge and language
✓ Lack of adequate monitoring due to other issues

Disadvantages of third party implementation:

✓ May be more supervision
✓ Lack of domain knowledge of the agency
✓ No 80 G benefit
✓ Biased, if also beneficiary
✓ No proper accounting
✓ Negative points remains undocumented.
✓ Dominance in local area
✓ Lack of adequate monitoring by the company

Question 9:

State the duties of Independent Director.

Answer:
Duties of Independent Directors:
The independent directors shall:
✓ regularly update and refresh their skills.
✓ seek information and, where necessary, take and follow appropriate professional advice
✓ attend all meetings of the Board of Directors and of the Board committees
✓ participate actively in the committees of the Board in which they are chairpersons or
members

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Corporate Governance Questions 11
✓ attend the general meetings of the company;
✓ keep themselves well informed about the company and the external environment in
which it operates
✓ not to unfairly obstruct the functioning of an otherwise proper Board or committee of
the Board
✓ report concerns about unethical behavior or fraud or violation of the company‘s code of
conduct
✓ assist in protecting the legitimate interests of the company, shareholders and its
employees;
✓ not to disclose confidential information
✓ not to share unpublished price sensitive information, unless such disclosure is
expressly approved by the Board or required by law.

Question 10:

Critically assess the reasons behind the Companies Act 2013 prescribing certain features
of corporate governance in a family run business in India.
Answer:

Family owned companies have specific problems due to its nature, their constitution, and their
managerial systems.
As the company grows, more members, children, grandchildren and so on are incorporated into
the family and different types of interests and relationships are generated within the company.
The larger the company, the greater the conflict of interest are.
In India, business was traditionally a family business. Even now 99% of the corporate houses
are owned by individuals or families. Nothing wrong in that. In fact, growth of family business is
quite substantial.

Due to following features, it is essential to take family business under purview of Companies Act
provisions in this regard:
✓ full time directors/other directors and senior management personnel are either from
the family or related to the family members.
✓ Formation of coterie is common.
✓ Control and ownership is diluted with shareholding being diluted on passing of
generation.
✓ Conflict of interest is very common where personal interest of the promoter conflicts
with the company interest. However, proper procedures are followed as per the Act to
avoid legal complication.
✓ Emotions are attached and therefore, some decision is taken which may not be
managerially correct.
✓ Where the family members are united, the non-family directors/managers are defunct
in decision making process. Where family is divided, there are more problems like
confusion in leadership, delay in decision making, distrust of outside stakeholders etc.
✓ The stability, reputation and performance is affected.
✓ Some families have clear cut roles of the family members in business with structured
succession planning, allotment of each company to each member to avoid conflict.
✓ Many hard-core professional avoid working in family business for obvious reasons.
✓ Death/disability of senior member in the family results to leadership management
crisis.

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