The latest installment of the “Pulse of Family Business” research series from Family Business Magazine and Brightstar Capital Partners highlights how today’s multigenerational families are structuring ownership, defining who counts as “family” and navigating the trade-offs between narrow and broad approaches to governance inclusion. The findings show a sector in transition, balancing legacy assumptions with modern expectations around openness, diversity and participation. The research also shows some enterprises struggling to evolve their governance approaches alongside their families.
A Multigenerational Ownership Base — and Rising Complexity
Today’s family enterprises are deeply multigenerational in both leadership and ownership. Nearly half report having second-generation leaders, 42% say G3 members are active in management and nearly one-third have G4 leaders at the table. Ownership follows a similar trend: 52% report G2 shareholders, 47% G3 and 36% G4. Nearly one in five now have G5 owners, and 6.5% say shares have reached G6 and beyond.
This growing generational stack has major strategic implications. As ownership disperses, the need for documented policies, formal governance processes and clear expectations around participation becomes increasingly urgent. The survey also notes that 74% of these businesses still have a family CEO — a testament to the family’s influence, but also a reminder of the need for balanced external perspective.
Defining ‘Family’: A Foundational — and Fraught — Question
One of the survey’s most revealing findings centers on a simple question: Who counts as “family” for governance purposes?
While 86% include bloodline descendants and 60% include shareholders, inclusion drops sharply from there. Only half include spouses, 27% include adopted or stepchildren and just 6% include significant partners. These numbers reflect a continued preference for traditional models even as modern family structures diversify.
Because governance participation shapes communication flow, representation and legitimacy, these definitional choices influence which voices are heard and how effectively the enterprise adapts to generational change.
Narrow vs. Broad Definitions: Two Governance Philosophies
Comparing families with narrower governance definitions (limited to shareholders and/or bloodline descendants) to the overall respondent base reveals two distinct approaches in a number of key areas.
Inclusion and Representation. Among narrower-definition families, only 24% allow in-laws to serve on a family council — 35 points lower than overall respondents. These families also include fewer generations and branches in formal governance roles.
Structures and Policies. Only 32% of narrower-definition families have a family council, compared with 45% overall. They also lag in adopting employment policies, communication portals and governance budgets and creating a more control-focused operating environment.
Use of Advisors. Consultant use is lower among narrower-definition families (65% vs. 72%), suggesting heavier reliance on internal problem-solving — an approach that can reinforce hierarchy and limit neutral facilitation.
Engagement Style and Conflict Framing. Narrower-definition families tend to frame challenges around power and succession clarity. Broader-definition families emphasize communication, emotional trust and generational differences.
Funding and Participation. Narrower-definition families are slightly more likely to fully fund meeting attendance (60% vs. 54%), while broader-definition families prioritize inclusivity, even when it adds complexity.
What This Signals for the Future
As ownership expands across generations and families grow more dispersed, definitions of who is considered “family” will increasingly determine governance effectiveness. Narrow definitions offer clarity in early generations but risk disengagement over time. Broader definitions strengthen connection and shared identity but require stronger structures and clearer policies.
Ultimately, families aren’t just choosing governance models — they’re choosing governance philosophies. And as they look toward G4, G5 and G6 stewardship, inclusivity may increasingly become a strategic imperative for long-term continuity.