Whilst structures and contracts can be important, for me governance is about how we make decisions; how we agree to agree and, perhaps more importantly, to disagree; and how we deal with our differences when we have them, as we inevitably will.
There is no one right approach to this. Each family must find its own way. What is important is that all involved feel the process is fair, and genuinely commit to it.
I help families and their advisers design governance processes that are suited to the individuals' personal learning and communication preferences and conflict styles, and to ensure that all have the necessary resources to use those processes with confidence.
Tony and Joan Young have three daughters, Carol, Elizabeth and Sally, all of whom are married with young children of their own.
The family wealth was created by Tony's grandfather, and is managed by Tony. The girls knew little about it, other than that the family was "comfortable", and all had become concerned as to what would happen if Tony became ill, or died. They are a close family, and get on well with each other, but they have no history of talking about these things and, like many, find it difficult to do so.
In an initial family meeting, it became clear that lack of information was the most pressing issue, and Tony began to explain the various structures and how they worked.
Subsequent confidential one-on-one meetings with each of them identified a number of concerns: Tony saw the family wealth as a permanent endowment, while the girls had never really thought about what it was for; none of the girls wanted responsibility for managing the assets if something happens to Tony, not least for fear of losing their siblings' wealth; and, each of their circumstances - and the calls they are likely to want to make on the family wealth - are very different. It also became clear that parents and children each processed information differently.
In subsequent family meetings:
- The whole family began to explore the family history, where the money had come from, and agreed why they should keep it as a shared family fund;
- They agreed that Tony would regularly circulate key information in a form that catered for each of the girls' individual learning preferences;
- Tony and Joan began mentoring the girls on how to select, and work with, their own professionals;
- Tony gave the girls his Lasting Power of Attorney, so that they could take over if anything happened to him; and
- Carol, Elizabeth, Sally and their husbands agreed how they would deal with decision-making, and with any differences between them, in the future. These processes were designed to accommodate the ways they each prefer to learn, communicate and deal with conflict.