Family Governance

If you google Family Governance you get 107,000,000 hits (with quotes 88,700). No wonder it is considered complicated, particularly when you add in all the family business governance expert opinions on how it should be done. In my view it is about one thing – having a way for family members to interact with each other in a positive way around what can be difficult topics and decisions. It begins with stating some Basic Principles for Family Governance Conversation/Discussion such as compassion and respect for each other. It then moves to a critical point – Role Clarity. This is where I see more problems than almost anywhere else. When you sit at the table you have to keep two things in mind – what role are you speaking from and what role are you listening from. Family business governance if the family is discussing the future of any family asset then both the speaking and listening roles should be that of Stakeholder Family Governance. Not Mom or Dad or son or daughter or brother or sister. Sounds pretty straight forward but it can be very challenging when, for example, Dad has 30 plus years of “knowledge” of what his son “is like.” At every family meeting clarity of roles should be part of the opening discussion Family Governance.

Supporting the ongoing evolution and practice of multigenerational family governance should be one of the roles of the family’s Legacy and Estate Plan. Trusts in particular can be designed to nurture and facilitate successful Family Governance across generations. Keeping the family “in healthy positive conversation” will create the best chance for the family’s financial assets to remain intact and growing family business governance.