Below is part 4 of our governance guide for family businesses. To read the other parts of this series, click the links below:
The board sets strategy, members provide capital, but who actually runs the business day-to-day? In family enterprises, management roles are often the most blurred. Dad’s the CEO, but Mum makes the financial decisions. Your brother’s officially CFO, but you’re the one signing cheques. The company secretary role? Nobody’s quite sure who holds it, or what it even means.
This confusion isn’t just awkward, it’s dangerous. Management and executives carry significant legal duties under the Corporations Act 2001 (Cth) (the Act), and unlike members, they face personal liability when things go wrong. In Parts 1-3 we covered governance foundations, members’ rights and directors’ duties. Now let’s tackle the operational engine room: your management team.
What management actually does (and why it matters)
Management implements the board’s decisions, policies, strategy and business plans. They’re answerable to the board for day-to-day operations such as hiring staff, managing cash flow, maintaining systems, and executing contracts. The board focuses on big picture issues; management handles the details.
High-level managers are considered “officers of the company” under the Act, in other words, anyone who participates in making decisions that substantially affect the business. This isn’t just the CEO. Senior managers, including CFOs, COOs and even some operational managers, fall into this category and carry corresponding duties.
Officer duties: not quite directors, but close
If you’re a high-level manager or officer, many directors’ civil obligations extend to you. You must act in the company’s best interests for a proper purpose, exercise care and diligence, not improperly use your position to gain advantage or cause company detriment, and not improperly use information obtained through your role.
The critical difference? Unlike directors, senior managers aren’t personally liable for company debts if it becomes insolvent. But breach your statutory duties recklessly or dishonestly, and you face the same civil and criminal penalties as directors, including significant fines, disqualification orders, compensation requirements or even jail time.
For more on director liability, see our guide on family business: what directors need to know.
Call us on 1300 654 590 or email usto clarify management duties in your structure.
The CEO: linking board and operations
The CEO (or Managing Director) is the most senior management officer. They act as the direct link between the board and management team, ensuring board decisions are actually implemented, not just noted and forgotten.
Key CEO responsibilities
The CEO must promote ongoing accountability to the board, bringing relevant matters to directors’ attention (often coordinating with the company secretary), build and lead the management team, take responsibility for the company’s success and reputation as its public face, consider members’ interests when making decisions, and determine how to apply company resources to meet objectives.
In family businesses, CEOs often struggle with dual loyalties – family expectations versus company needs. Your sister wants a job; the company needs someone qualified. Dad wants to pull cash out; the business needs reserves for growth. The CEO’s duty is clear: company interests come first. That doesn’t make family dinners easier, but it keeps you out of court.
The CFO: guardian of financial integrity
The CFO is the most senior executive responsible for the company’s financial affairs. This role has become increasingly critical as regulators scrutinise financial reporting and tax compliance more aggressively.
CFO responsibilities include
Maintaining the company’s present financial position and stability, developing economic and tax strategies (including forecasting and modelling), managing budgets and investment decisions, overseeing financial reporting to management and the board, monitoring implementation of strategic business plans, and allowing auditors to access company books and providing assistance for audits (in large proprietary companies).
In family businesses, CFOs face particular pressure around related-party transactions such as loans to family members, payments to family trusts, and personal expenses run through the company. These arrangements must be documented and arm’s length, or the CFO faces scrutiny for facilitating breaches. For insights on common issues, see our article on what is Division 7A really all about.
The company secretary: compliance gatekeeper
The company secretary sits on the board and is often part of the management team, a unique hybrid role. They deal with the company’s financial and legal compliance issues, ensuring adherence to the Act and ASIC requirements. This responsibility can continue even after winding up or deregistration.
Company secretary responsibilities
The company secretary administers company records (including establishing and maintaining the member register), organises board meetings and general meetings, informs the board of all relevant business (acting as link between management and directors), assists with strategic planning, policy creation, management and compliance, and notifies ASIC of changes in company records.
Many family businesses don’t formally appoint a company secretary, leaving these duties scattered across family members. This creates compliance gaps – minutes not kept, ASIC notifications missed, registers out of date. These aren’t trivial oversights; they’re statutory breaches with potential penalties.
Call us on 1300 654 590or email us to review your compliance obligations and appoint appropriate officers.
Common management pitfalls in family businesses
Over decades advising family enterprises, we see recurring management failures:
Informal authority without formal appointment
Your son manages operations but isn’t formally appointed as COO. When disputes arise or he signs contracts, who had authority? Courts may find him a shadow director or de facto officer, exposing him to full director liabilities without the protections or documentation. Read more on the hidden risks of shadow and de facto directorships.
Confused reporting lines
The CEO reports to the board, but in family businesses, the CEO also reports to Dad (the founder), Mum (who handles finances), and the family council (which doesn’t legally exist). This creates paralysis when interests conflict. Clear governance documents must define who reports to whom, and what happens when family and business interests diverge.
Personal expenses through the company
Management approves the owner’s first-class flights, luxury car, and private school fees as “business expenses.” This isn’t just a tax problem, it’s a breach of duty. Officers must ensure company funds are used for company purposes, not shareholder benefits disguised as expenses.
No succession planning for key roles
Your CFO retires, taking 30 years of institutional knowledge. No succession plan exists, and the family scrambles to find someone who understands your trust structures, Division 7A obligations, and related-party arrangements. Effective management governance includes documented succession for critical roles.
Building a professional management framework
To professionalise management in your family business, define each officer role in writing (CEO, CFO, COO, company secretary), specifying duties, authority limits and reporting lines. Document delegations of authority – who can sign contracts, approve expenditures, hire staff. Implement regular reporting to the board on monthly financials, KPIs and risk updates. Separate family matters from business decisions with clear policies. Ensure officers understand their legal duties and obtain appropriate indemnities.
This doesn’t mean abandoning family culture. It means protecting the people you love from personal liability while building a business that can pass to the next generation intact.
How we support family business management
As advisers to business owners and wealthy families, we help family enterprises professionalise management while preserving family values. We review your current management structure and identify gaps, draft position descriptions and delegations of authority, implement compliance systems for company secretarial functions, advise on officer duties and related-party transaction documentation, and prepare deeds of indemnity and access to protect appointed officers.
Whether you’re the founder ready to hand over operations, the next generation stepping into management, or an external executive joining a family business, clear governance protects everyone. Call us on 1300 654 590 or email us to discuss how we can help.
The information contained in this post is current at the date of editing – 23 April 2026.
