When you hear the word governance, you might quickly turn your mind to corporate governance. You might think about the regulations you have to deal with when doing investments and building businesses. These can be stringent and unfavorable, which causes an uncomfortable feeling as a reluctance to dive into what is perceived as a tedious task.
Yet governance is always put in place to encourage honesty, transparency, and promote fairness – something which we all aspire to in our daily work. Most likely when you think of governance, you will think of your own government. With the current status of many governments across the world not performing at the level expected by their citizens, it begs the question – is governance trustworthy? Or is it risky and dubious?
Let’s unpack governance within a family office setting. It can be defined as ‘the way we choose to communicate and interact with each other as a family and concerning the wealth we possess.’
Research has shown that investing early ineffective family governance and likely pay dividends for the family in the long term. As we know, every family is unique. However, families that have greater wealth, are defined by several generations, and reside in different jurisdictions will undoubtedly have greater complexity.