Family governance relates to the way family members reach decisions together. This might involve the creation of a Family Office, Family Committees or a Family Charter.

The process of Governance often breaks down within families because they have not thought through the best way to reach decisions across generations, in a rigorous, structured way.

Our proprietary process focuses upon what we call the “Family Transition Pyramid”, which enables family members to feel empowered and clear about their decision-making together.


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Family Transition Pyramid

The majority of families create a governance structure by starting at the top of the pyramid without first building solid foundations. They often begin by creating various family structures and committees. This might involve the creation of a Family Office, a Family Charter or a Family Wealth Mission.

Unfortunately, this approach often produces conflict, upset and discord – the opposite of what the families were intending.

Our approach is for a family to begin by prioritising the “People” aspect of the family; improving the quality of communication, deepening the levels of trust, aligning around a shared vision and establishing a leadership structure which everyone agrees upon.

Once this foundation is in place, once conflicts have been resolved and the family find a common cause across all generations, then they are able to focus effectively on “Philosophy”, create a set of values and a goal which unites the family through a sense of affinity rather than simply relatedness.

On top of these strong foundations, a family will then naturally agree upon a range of “Procedures”, comprising policies and rules for the operational conduct of family members. The final part of the Family Transition Pyramid, “Process” puts a range of effective structures in place to enable the family to formally organise themselves. These Processes, however, can only bring long-term success – and can only be meaningful – once the family has effectively built the supporting elements of the pyramid in terms of People, Philosophy and Procedure.

 

Process

Finally, traditional
structures are put in place:

  • Family Office
  • Family Board
  • Family Committees
  • Family Charter
  • Family Policies

Procedure

Procedures for the conduct of family
members are put in place:

  • Roles and Responsibilities
  • Managlient of Conflicting Aspirations
  • Expected Participation of Family Mlibers
  • Involvlient in Family Business
  • Access to Family Funds

Philosophy

The family must then agree on the
philosophy that unites them:

  • Family Values
  • Family Wealth Mission
  • Educating the Next Generation
  • Effectiveness in Conflict Resolution
  • Reaching Decisions Together

People

People form the foundation of our approach:

  • Shared Family Vision
  • Quality of Communication
  • Depth of Trust
  • Affinity Across Generations
  • Agreed Family Leadership

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