Effective family governance structures can help create clarity, manage expectations, and achieve greater harmony between family members. This generally leads to an easier transition of wealth and a better prospect of preserving and enhancing family wealth including family business interests.
Before putting in place a trust or company structure to hold family wealth, many families will wish to give consideration to wider family governance issues.
Approaching family governance in the right way is critical, with an inclusive, honest and open approach often providing a strong platform for family and enterprise success to be established.
For many families the culmination of a family governance exercise is the creation of a family charter. A family charter isn’t a legal document and one size doesn’t fit all. It can, however, strengthen family bonds and conflict resolution skills. This will often prove invaluable as a family passes wealth down from one generation to the next and the family members and assets become spread out over many jurisdictions.
Key areas that a family charter may cover include providing clarity over issues such as decision-making, responsibilities, ownership privileges, and involvement in the enterprise.
Charters are created by the family, usually with an experienced, objective third party such as a lawyer or trusted advisor helping the process along. Having an outsider guide the family through the steps of creating a charter prompts open, honest dialogues that otherwise may not occur.
At Highvern we regularly engage in the governance process with families prior to implementing a wealth structure. We also work with families on an on-going basis by ensuring that the family governance and any wealth structures are regularly reviewed in light of changing circumstances.