The listed family companies can’t use the assets which are reserved for the company for their own personal use. This is because the asset which belongs to the listed company also belongs to the investors of the company. Therefore, the investors also have the right to ensure that the business should run in an efficient manner and there should be returns to the shareholders of the company. These principles are helpful as it helps to preserve the independence of the shareholders of the company and it also attempts to do the prevention of the conflict of the interest which can take place when there is a conflict of interest amidst different shareholders of the company. There are a number of indications which support for the existence of the control on some of the entities which are related to the company. This may include the holding of the majority of the ownership interest and control on the associated rights for voting either through the singularity or in conjunction with some of the close members of the family. Also because of these principles, there can be a control on the board of directors and the members of the family.
It is important to have the principles in order to have the long term survival of the company and to work in a fare manner which includes the independence in the analysis of the objective. This independence is required both in the process of decision making and also in the process of monitoring of the company. The board members who may be elected from within the company aren’t able to work in the manner which has been actually desired for the business (Council, 2007). These principles and recommendations help in the smooth running of the companies for long times. Also because of these principles, there can be protection for the shareholders when their rights are violated.