Dalmia feels the Indian family structure is a huge emotional and social asset

Puneet Dalmia, 38, Managing Director, Dalmia Cement, explains why it is important for business families to look closely at issues relating to family, business and governance. "My grandfather started Dalmia Cement in 1935," he says. "Mine is the third generation. There is a statistic that hits you in the face. Whenever there is a generational shift in a family business, chances are more than 50 per cent that the business will not survive in the same way or form. In the third generation, this probability increases to 90 per cent."

Size: Rs 4,400 crore No. of generations in business: 3 Key measures in place: Family council formed, constitution drawn up Goal: Ensure family role on all fronts: in people welfare, risk taking and capital allocation Mantra for success: Increase tolerance, listen closely to others

To understand the subject better, Dalmia signed up for a six-week course at the International Institute for Management Development in Switzerland. Later, in 2006/07, all Dalmia family members took a three-day course on family businesses at the Indian School of Business, Hyderabad. Today, the Dalmias have in place both a family council and a written constitution. "Anything verbal is subject to memory lapses and to misinterpretation, whereas what is written down brings everybody on the same page," says Dalmia. He takes very seriously what John L. Ward, the family business guru, once told him: "Have a policy in place before the need for it arises."

Dalmia feels the Indian family structure - particularly the joint family - is a huge emotional and social asset. The family tries to leverage this. Four key family council members (Puneet, his father, Y.H. Dalmia, uncle J.H. Dalmia and cousin Gautam Dalmia) hold meetings every Tuesday afternoon.

Why do families break up? "It happens when people start becoming bigger than the institution. Selfish motives become more important," says Dalmia.