How far you go with the governance structure will depend on your own unique family circumstances – there is no ‘one size fits all’ approach that can be applied here.
You need to think about, in practice, what is going to work for your family. Drawing up a sophisticated set of rules and procedures is pointless if your family isn’t going to follow them.
The level of governance will be influenced by the size of the family, complexity, and the likelihood of dispute.
A small family office comprised entirely of a close-knit group of family members, with likeminded thinking around what is important to the family, may feel they don’t need formal processes documenting how decisions are to be made, or who is responsible for what. However, that may change over time as the family grows and new wants and desires are introduced, requiring a greater need for formal governance structures to re-establish and embed the goals and visions of the family.
You may wish to document the goals and vision of your family in a Family Charter, to be followed and implemented by the family office. This evolving document may cover areas such as: how decisions will be made and the process that will be followed in the event of a dispute or deadlock; what are the roles and responsibilities of the various people within the family office; how often meetings will take place; and how information will be communicated to the broader family members to obtain buy-in and ensure everyone is informed.
The experience and skills of the family members will also have an impact on the level of governance. The matriarch or patriarch of the family may have the necessary experience and skillset, and responsibility for setting and implementing the strategy, but what will happen when they die? Is there a family office succession plan to ensure the family office survives after they are gone?
How are you going to share your knowledge and experience? Educating the next generation is critical to ensure the long-term success of your family office.
These are just some of the questions that should be considered when establishing the governance structure for your family office.
Working with clients
We work with clients to develop the right governance structure for your family office, tailored to your own unique family circumstances, to help ensure your family’s values, goals and vision are deeply embedded.
Contact your usual advisor to find out more about our Family Office Services and Family Office Start-up package.
