Difficult Dialogue

Haseeb knock the door of his grandparents’ room, seeking the permission to sit with them. As always Haji sahab wholeheartedly welcomed his beloved grandson. Haseeb was disturbed, so he placed his concern in front to dada (it’s the term used to call paternal grandfather). Can I ask you, what happened when your siblings asked to join you in the textile business based on the seed money they invested to initiate the business?

Hawa, the grandmother, realized the importance of question which needed a detailed answer, so she left the room as an excuse to bring some tea for them. Haji Sahab first placed a question to Haseeb in order to get more clarity of his situation. “What made you realize to ask this question?”

Haseeb mentioned he was worried that after investing his life’s golden years and efforts to develop a brand if siblings or cousins start claiming their executive role or demanding liquidation of their investment, then how can a business survive and where will he stand. If he didn’t pursue career of my own choice and join the family business, but then at any point of time in future Humayun Uncle family decides to withdraw their investments, how will he manage that situation? That’s why he thought of asking his Dada to suggest a solution based on his experience.

Haji Sahab started answering Haseeb questions. He told his dear grandson the importance of documentation, which is mentioned as one of the important principles in our religious book (Quran) which is crucial part of our religion (Islam). So, Haji Sahab had a written agreement with his siblings when he started a business. Following were the key features of that agreement:

1.?????? The investment is in monetary terms as a non executive shareholder of the company and at any point of time this will not allow executive role or active participation of the family members in the business.

2.????? Investment will have its shareholder entitlement for the profit distribution in terms of dividend.

3.????? In case of shareholder want to liquid their investments, the first right to buy will be with the executive shareholder of the company.?

4.????? Further, there will be appropriate time frame allowed to the business entity to arrange funds to acquire the shares.

5.????? At any point of time if the non executive shareholder want to start their own business in the same sector then, existing established entity executive director will be open for the mentoring and facilitation for the establishment of new business.

Haji Sahab mentioned few of such policies which helped him manage the situation. Moreover, he said that he learned these policies from the business where Haji Sahab used to work before coming to Pakistan. He further mentioned that few of such crucial policies are incorporated in the family constitution adopted by the “Haya incorporation” and "Buy-sell agreement” is the crucial component of that document.