Governance guides family offices to more strategic decision-making

Do you have a formalized decision-making governance in place?  

Family office affairs can be complex and multitiered, involving collaborative decision-making on a variety of initiatives from philanthropic endeavors to day-to-day administrative tasks. Along with the daily decision-making, family offices must also take into consideration the wishes and goals of various generations and their specific needs. How do these collective family members make fair and timely decisions for the overall good of the enterprise? The convolutions and variables are endless for family offices, and that’s why a formalized governance process is essential.

Key considerations

What are the key elements to keep in mind when implementing a family office governance strategy?

  • Start early in the development of your governance planning, if possible, and be inclusive with family members involving all generations, or a select representative, for a cross section to gain important input and buy-in.
  • Determine your family objectives around investing, philanthropy, estate planning and more. Knowing whether family members wish to be active in family office operations or if members prefer a more passive investment approach is also key.
  • Work with a coach or family office consultant to help establish ground rules, provide guidance and objectivity. Many of the decisions affecting the family can be emotionally charged. It’s helpful to have an objective outsider to guide the initial governance structure to assure fairness and to provide a holistic viewpoint that benefits the entire family enterprise.
  • Communication is key in any business and this is certainly true for family offices. Establish regular meetings with key designated family leaders for discussion, decision-making and assessment of investments and charitable efforts. Likewise, annual or more frequent family meetings to present updates, encourage dialogue and obtain permission on business, estate and philanthropic initiatives is a must.
  • Revisit your family office governance strategy over time to consider revised objectives, changing family dynamics, the sale of assets and more. It’s important to establish a governance plan, but it shouldn’t remain static. Rather, it should evolve and grow just like your family.

Would you like to discuss your family office governance policies?

Contact our family office specialists today. 

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