The Human Capital level is where the family organize themselves to focus on a cross-generational, long-term goal for the family’s wealth. Throughout this website, there are a number of approaches which detail how this can be successfully achieved.
From a structural perspective, a family will usually organize itself with a Family Council, perhaps a Family Assembly and a range of other groups to manage a family’s Philanthropic or Next Generation goals.
Please note: none of these structural solutions are of any use unless a family first agrees on its Family Wealth Mission and resolves any interpersonal conflicts which are currently present or which might arise upon the death of a patriarch or matriarch.
Included in the Family Administration section are the often complex, multi-jurisdicational tax, legal and inheritance planning processes to ensure the greatest quantum of the family’s wealth is passed onto the next generation.
The “Family Investments” level is where the family establish a best-practice structure to deliver their investment objectives. This will include effective audit, management, benchmarking and reporting of a family’s investments. Typically, family wealth is best protected by an independent Board of experts in the form of an Investment Committee, who ensure that a family’s investment objectives are clearly defined and faithfully adhered to in execution by the CIO and their team.
The “Business Governance” section is designed to professionally run a family-owned enterprise. One of the great challenges many families face is that the wealth creator (often the father) is the majority Shareholder, Founder, CEO, Chief Strategist and key decision-maker tied into one. This strangely unique and yet common dynamic makes an orderly, well-structured and effective transition from one generation to the next particularly challenging. For this reason, we tend to focus initially on two structures to aid the transition; the Business Protocol and Shareholders’ Board.
The role of the Business Protocol is to formally establish the policies and procedures that a family uses to manage its interests in the family business.
The purpose of Shareholder Board (as distinct from the operational Executive Board) is to provide long-term expert and authoritative guidance to family members on the running of the business and the roles and responsibilities of shareholders.