The successful application of Family Governance Mechanisms (FGM) theory in practice


Name of the provider / Family business 

Mel.- Kik. 

Professional sector and company size 

Pasta production industry. The average number of staff employed for 2021 was 323 in the Group and 227 in the Company

Need/problems/challenge addressed 

Family Governance Mechanisms (FGM) 




KPMG Certified Public Accountants S.A. – 8th Family Business Forum 

Link to more information  

The MEL. pasta industry has operated for a century and is in its 3rd generation of succession. The business exemplifies a healthy approach to FGM issues, following family principles while adapting changes based on new needs.  

Regarding the succession (how it was carried out and how it is planned to be achieved), the transition from the first to the second generation achieved with the feeling of responsibility towards the family but also the employees and partners of the business, without simultaneously feeling under pressure. From the first generation, the love for work and the principles that govern the business were inherited, namely the belief in the quality of the products, the good name and the relations with customers/suppliers, the continuous investments for development and improvement and the excellent family environment that helps employees feel like family in the company where they work. The respect for these principles is the key to the mechanism of succession. The same process was followed with the succession from the 2nd to the 3rd generation. The 3rd generation reports that the key to successful succession was the perception of people’s work, realizing the value of each part of the company, gradual involvement in business decisions, and being involved with the company from an early age. Also mandatory for a smooth succession is the existence of a transition period with gradual delegation of responsibilities. 

The company has established its own family constitution which is signed by all family members with a shareholding relationship with the company and constitutes a code of values and principles that govern its operation. Based on this constitution, governance mechanisms are also defined, such as the family council, which meets annually and has a more consultative nature, with the aim of strengthening family relationships. Regarding the management boards, apart from the family board, there is the 5-member board of directors, and the managing director/CEO (3rd generation). About the CEO, the goal of the company is to be managed by a family member, without this being necessary as meritocracy is above all. The CEO must have qualifications, character, and respect the family tradition to its advantage. The father (2nd generation) is the president of the company. Between him and the CEO there is daily communication in a relationship of mutual respect, with the younger generation wanting to learn from the older one and the older one watching without interfering. Structured discussion between the two parties also exists during the Board of Directors meetings. In the Board of Directors, there are also three independent members (an idea of the new generation). which are outside the family as well as the company. These members have many years of experience and give advice and new ideas for improving methods and policies while simultaneously making the company more extroverted. The Board of Directors and the new generation are responsible for making decisions. The new generation is also more tolerant of error and tends to transfer responsibility for decision-making to lower managers by sharing information more so that everyone knows what they are responsible for.