Running a family business can sometimes mean that policies and procedures may be treated as being ‘flexible’ and so we thought we’d take a look at some of the challenges that a family business may face:
The size of the business can have a great impact on compliance, especially if there are less than 5 employees, as it usually means that a smaller workforce may mean lower compliance.
Some points to consider are:
- Research shows that over 70% of non-compliant businesses are owned and operated by family members, and when an accident happens it can be catastrophic; 80% of businesses fail to survive a major event.
- When a business is prosecuted for breaches of legislation i.e. Health & Safety at Work Act 1974, the fine can be unlimited. If the business is convicted, it is also likely that it will be ordered to pay the court’s costs as well as its own legal fees. Taken as a whole, the totality of fines, legal fees and costs can be crippling but when you add them to the costs and consequences arising from the simultaneous conviction of its directors or partners, many businesses do not survive.
- It is important to consider the fact that each individual director and partner and every senior manager is also liable for a breach of health and safety regulations and may be personally prosecuted as well as the business. Where a death has occurred, that can include a charge of manslaughter by gross negligence.
- When an individual is convicted, the resultant fine (again, unlimited) is in addition to any fine payable by the business and the individual may also receive a substantial prison sentence. The individual’s legal fees will also have to be paid and so will any additional court costs.
- When one individual in a family is so exposed it is traumatic enough. When it is several members from the same family, it is even worse.
- Family-run businesses are more prone to health and safety failing because of the organic nature of their development and organisational structure. Generally, individual areas of responsibility are less well defined and the business operates on a system of traditions rather than on systematic policies and procedures. When it comes to health and safety this leaves each individual exposed to the cracks.
Club Insure Risk Management can help to ensure that family run business are fully aware of their duties of care and the consequence of failing to discharge said duties. We can then offer sensible solutions to keep their business and their employees (family or not) safe.
If you have any questions about your club’s risk management, get in touch today. We’re more than happy to have a no-obligation conversation. Simply click the button to contact us at the top of this page.
