If you believe your family has no need for governance practices, you may not realize you already have established some of these practices. If you’ve discussed succession planning, ESG or ethical investing, long-term or opportunistic investments designed to propel the family’s holdings into the future or even prenuptial or postnuptial agreements for future marriages, then you’ve put some governance in place.

Ad hoc, however, is not an acceptable method of implementing family governance.

True “governance” incorporates all those and other guiding principles in a well-deliberated and planned document that memorializes the entire family’s intentions. It should be binding, yet flexible enough to change as needs or conditions evolve.

These are some of the core elements that drive good family governance.

Governance begins with a conversation. Unlike the popular HBO series Succession, where patriarch Logan Roy rules with a steel grip, effective and equitable governance for a family or their closely held businesses avoids such dominance. This is where the family meeting rises high. Such meetings might be called by a patriarch planning for success or the next generation planning their futures. Family members must be free to explore their needs, express their expectations and, in some cases, examine simmering conflicts, as governance planning often fails amid lingering issues. What’s more, these aren’t one-and-done events. Family meetings should be held regularly with all adult family members included and a clear agenda in place.

What’s your family values or mission statement? Many families assume they have shared values. They are committed to preserving family cohesion, wealth and philanthropic efforts, as well as ensuring the impact and legacy of current and future generations. But family values must be intentional. They should present pillars that represent the entire family, akin to many corporations’ mission or values statements. An example may be, “The Smith family is committed to faith, philanthropy, equality and ensuring our family legacy into the future.”

Create your roadmap. Like life itself, today’s wealth is created, accumulated, elevated, distributed or donated, yet it is not guaranteed tomorrow. The best governance must include a roadmap of how and where you hope your wealth to manifest in the future. Governance should spell out all your details, including mention of the estate plans (if not the specific distributions upon the patriarch’s passing), current investment strategies, donations to charity, etc.

Be flexible. Governance is not cast in stone. Values, needs, relationships and even charitable intentions change over time. This must be a living document open to updates to ensure it remains aligned with a family’s shifting needs or expectations.

Triggering events. What can trigger the need to revise the family governance documents? It could be a marriage, the birth of heirs, deaths, divorce (especially divorce late in life) or issues related to family members who are abusive (of others or of substances). Response to such events should find their foundation in the original document’s guiding language. In other words, how the family responds should already have been addressed in the governance documents. Every foreseeable possibility should be addressed.

Leadership roles, participation and contributions. The document should lay out leadership roles in the family office and the governance process, as well as management and/or investment committees. No matter the “leadership,” all adult family members should be invited to share their views. Excluding them may create frustration and animosity. Including them in the discussion can help ensure goodwill and that common goals are pursued.

Consider outside guidance. For many families, the initial creation of family governance is foreign territory. Like so many life events, the first time can be confounding, especially along a path never likely to be traveled again.

Family governance should be welcomed as a guiding principle that directs the process to protect, preserve and improve a family’s legacy today — and tomorrow. 

Samy Dwek is the founder and CEO of the Family Office Doctor and White Knight Consulting, advisory firms that work to preserve the multi-generational wealth of high-net-worth individuals and family offices.