Every family contains smaller groups that have both overlapping and competing interests. Effective family governance systems serve, manage, and balance those interests.
A successful governance system can be instrumental in equipping your family to navigate the challenges of wealth, business, and legacy continuity. Creating a structure that is inclusive enough to serve the current generation, yet flexible enough to be embraced by future generations, is a crucial task for multigenerational families who hope to sustain and preserve wealth for generations to come.
This white paper discusses the foundations of a family governance system, and how to construct and customize an approach that works for your family. We also introduce the components of a family governance system, which can include a family assembly, family council, a judicial entity to resolve conflicts, and subcommittees to manage specific tasks or activities.
- Family governance provides a blueprint for joint decision making through the use of agreed-on principles, policies, and practices based on a family’s unique needs and characteristics.
- Family governance is also a system to manage individual interests, define roles and boundaries, and support your family vision.
- Your family governance system should be a living entity, one that builds on family tradition and can be amended as your family evolves.
- Family governance may sound dreary or restrictive but when used appropriately you can spark conversation, generate a sense of inclusion, offer an avenue for feedback, determine future family leaders, and create a long-term path to successfully pass wealth from generation to generation.