Lately, I’m becoming enamoured with the term “Family Governance”, as some regular readers may have noticed.
In fact, I wrote a post just a few weeks ago relating to this subject, “Family Governance: From Filaments to LED’s”.
The subject has undergone an evolution of sorts in my mind.
I’m looking at it in new ways as I learn more, work with more families, and adapt my thinking to the ways other related subjects also continuously evolve.
The Family Governance “Field”
I’m not sure if we’re yet at the point where we can say that Family Governance has evolved into its own “field”, but I know we’re moving in that direction.
In fact, the field, as it stands, also feels like it is evolving in its own right.
If you’re interested in it, or even curious, please join me in New York City in January for the 3rd annual conference of the Institute for Family Governance.
I’ve attended the two previous editions, and my blog on the 2018 version can be found here: “Realistic Family Governance Goals.”
How to Make Family Governance “Stick”
So in terms of the evolution of family governance, we’ve already got the fact that the term has been growing on me and evolving in my mind, and the fact that the field is also evolving.
But the main point of this post that I’d like to make is how important it is for Family Governance to evolve within a family, if it is to have any chance of “sticking”.
Yet as more people discuss a certain topic and it seems like it’s growing legs and becoming “a thing”, there are always some who try to figure out how to sell the idea to others, with a view towards making money at it.
I supposed that’s to be expected, much as I mentioned last week when we discussed the family office space and the “business opportunity” problem there.
FOR the Family, BY the family
From my perspective and experience, when governance is thrust upon a family, either by one family leader from above, or by “experts” from outside, it is likely doomed to failure.
My go-to expression for this is “FOR the family, BY the family”.
Notice that I did not say for the family by one family member, or even for the family by experts chosen by the family.
You cannot buy governance off the shelf; it is not a product. Of course, that doesn’t mean that there aren’t people who will try to sell it to you.
No Stone Tablets
Any family that’s interested in successfully transitioning their wealth from one generation of their family to the next will need to invest some time and effort into developing the governance structures and systems that will help them achieve that goal.
Unfortunately, there’s no set of “stone tablets” that Moses is going to arrive with, listing the Ten Commandments of family governance.
I hear you, “OK, Steve, so it needs to evolve. But from where, and how???”
Start with a Family Meeting
You really need to call a family meeting and throw the subject on the table.
Someone from the leading generation, (usually “Dad”) has to call everyone together and make it clear that they want to make sure that the family will be prepared to eventually take over the family wealth in all its forms.
They should explain that they’d like to ensure the smoothest transition possible and that this is the beginning of a series of regular meetings that will be used to establish the “who, what, when, where and how” all that will happen.
The first meeting needn’t be long, because family members will need time to adjust to this news.
But please don’t leave until the next meeting has been scheduled for a couple of months down the road.
Start Where You Are
Governance is all about three major questions:
- How will we make decisions together?
- How will we communicate?
- How will we solve problems together?
Don’t expect the answers to just materialize without any work.
The Good News?
The good news here is that just figuring out where to begin and how to start the governance process, so that you can see how it all evolves, is the best way to ensure that it will actually work.
It’s a PROCESS, and how you get there is even more important than where you get to!
Get moving, keep going, and watch the evolution.