Read about family governance

“Shirtsleeves to shirtsleeves in three generations” - so goes Andrew Carnegie’s famous prediction for family fortunes. Fortunately, more and more wealthy families are now focusing on involving the next generation early on to provide them with a clear understanding of where the wealth came from and who worked hard to build it.

The development of the next generation is a key focus area within family governance, family offices, banks, and among advisers. However, interest in the development of the current/experienced/older generation often ends once succession has taken place—or when the final full stop is written into the will.

“Instead of ‘going public’, you could say we’re ‘going purpose’,” said Patagonia founder and billionaire Yvon Chouinard when he announced that 98% of the company’s shares had been transferred to the Holdfast Collective, to be used in the fight against the climate crisis.

Globally, there have never been more billionaires than there are today – and this is reflected in the growing number of family offices. This article explores different models and structural approaches to setting up a family office.

Since ancient Rome, the role of the ‘family office’ - or majordomo, as it was called then - has served as the family’s anchor and focal point for decisions concerning wealth management and the organisation of family events, duties, and income.

The 'Greatest Wealth Transfer in History' is in full swing globally, leaving Baby Boomers and Generation X facing perhaps the greatest communication challenge of their lives.

Ambassadorship in family ownership is a shared understanding of what concrete expectations we have of one another as owners - not just toward the next generation, but also toward older generations, partners, and teenagers in the family.

In Part 1 of this article series, we described how an ownership strategy supports effective ownership, and which topics should be included in a well-crafted ownership strategy. However, while the strategy document itself is important, much of the real value lies in the process that leads to it. A well-run process sparks new conversations within the family or between the owners and the family office. It also brings insights into the expectations, concerns and thoughts of the people involved in the ownership circle – creating a deeper mutual understanding between those involved. When expectations and concerns are brought to the surface in a safe, calm, and – if needed – facilitated setting, they can be addressed constructively.

For the past 15+ years working with ownership strategy, we’ve heard many variations of these statements from families, founders, and family offices. There are undoubtedly numerous benefits for both the ownership group and the individuals involved when time is invested in developing an ownership strategy. The more mature, diversified, and complex the ownership structure is, or is set to become, the greater the need for a shared strategic foundation and clear agreements.

At Harbour, we meet many wealthy individuals and families who are curious about how to establish and further develop the right family office for themselves. A couple of weeks ago, we published the first article in this short series about the well-developed family office.