Family governance

Date: 04 Apr 2023

Karen Jones

Citywealth has the Citywealth Forum coming up on the 16th May bringing leaders in the field together to talk about the trending topic of family offices and their move to professionalise and structure post covid. This trend was identified at the Citywealth editorial committee meeting in 2022. The board consists of Rakesh Dabasia, Director, Buzzacott, London; Michael Fischer, Partner, Fischer Ramp Buchmann, Zurich; Marc Halsema, Founder & Principal of Jaclise International, New York; Philip Higson, Group Head of Family Investment Office, Quintet Private Bank, Zurich; Joshua Matthews, Co-Founder & Managing Partner, MASECO Private Wealth, London; Stella Mitchell-Voisin, Managing Director, Summit Trust International, Geneva; James Penny, Head of Uk International Private Bank at Barclays, London; Joshua Rubenstein, Partner and Chair, Private Wealth Department, Katten Muchin Rosenman, New York; Lisa Vizia, Director, Saffery Champness, Guernsey and Glen Atchison, Consultant and lawyer.

Family governance is a critical aspect of managing family wealth, business, and legacy. It refers to the structures, processes, and systems put in place to facilitate decision-making, communication, and collaboration among family members. Effective family governance ensures that the family’s values, vision, and goals are aligned and that conflicts are resolved constructively.

Caroline Garnham, a family governance expert, emphasizes that family governance is not just about managing wealth, but also about managing relationships. She believes that a well-designed governance structure can provide a framework for open communication and collaboration among family members, promoting unity and strengthening relationships. According to Garnham, family governance involves creating a shared vision, developing family policies, and establishing a family council to manage family affairs.

One of the critical components of family governance is the development of a family constitution, which outlines the family’s values, vision, and mission statement. The family constitution serves as a guide for decision-making and provides a framework for resolving conflicts. It can also establish rules for family members’ involvement in the family business and investment decisions, succession planning, and wealth transfer.

Katten Muchin Rosenman, a law firm specializing in family governance, emphasizes the importance of succession planning in family governance. Succession planning involves identifying and grooming the next generation of family leaders and developing a plan for transferring leadership and ownership of the family business. Effective succession planning involves creating a leadership development program, establishing a process for evaluating and selecting successors, and implementing a plan for transitioning leadership and ownership.

Another critical aspect of family governance is communication. Effective communication is essential for maintaining trust, building relationships, and resolving conflicts. Family governance experts recommend creating a family council or advisory board to facilitate communication and decision-making among family members. The family council can provide a forum for discussing family business and investment decisions, succession planning, and other family matters.

In conclusion, family governance is an essential aspect of managing family wealth, business, and legacy. Effective family governance involves creating a shared vision, developing family policies, establishing a family council, and implementing succession planning. It is also critical to develop a family constitution, which outlines the family’s values, vision, and mission statement. By promoting open communication, collaboration, and unity among family members, family governance can ensure the sustainability of the family’s wealth, business, and legacy.

Arabella Murphy, an expert in family governance and philanthropy,  will also be speaking at the forum, she emphasizes the importance of family governance in the context of philanthropy and impact investing. In her work with families, Murphy has seen the transformative power of philanthropy in bringing families together and aligning their values and vision for the future. However, without proper governance structures in place, philanthropic initiatives can lead to conflicts and misunderstandings among family members.

One area where family governance can be particularly beneficial is in impact investing. Impact investing refers to investments made with the intention of generating positive social or environmental outcomes, as well as financial returns. Many families are increasingly interested in impact investing as a way to align their wealth with their values and make a meaningful difference in the world. However, impact investing can be complex, and family members may have different ideas about what constitutes a worthwhile impact investment.

According to Murphy, effective family governance can help families navigate the challenges of impact investing by providing a framework for decision-making and accountability. This can include creating a clear investment policy statement that outlines the family’s investment goals and criteria, as well as establishing a process for evaluating potential investments and monitoring their impact.

Murphy also emphasizes the importance of involving the next generation in the family’s philanthropic and impact investing activities. By engaging younger family members in these initiatives and providing them with opportunities to learn about the family’s values and vision, families can ensure that their philanthropic legacy continues for generations to come.

Arabella Murphy has nearly 25 years’ experience of helping individuals and families from around the world to plan for the future and resolve disharmony. She particularly specialises in finding pragmatic, commercial outcomes. She qualified as a solicitor in 1996 with Allen & Overy LLP, becoming a partner in 2007. In 2009, she was a founding partner of Maurice Turnor Gardner LLP. As a solicitor, Arabella was consistently ranked in the top tiers of the major directories for her expertise in private wealth planning and dispute resolution. She is a member of STEP and has written or co-authored several books on private wealth topics. Arabella qualified as a mediator in 2019 with the London School of Mediation.

Our speakers for the forum are:

Joshua Rubenstein – Co chair, Katten Muchin Rosenman, Partner and National Chair; Khaled Said, Capital Generation Partners, Managing Partner; David Bain, Family Capital, Founder; Arabella Murphy, IPOS Mediation, Mediator and Strategic Advisor to Families; David Kilshaw, Rothschild & Co, Managing Director, Head of Private Client Wealth Solutions; Zita Nikoletta Verbényi, The Legacy Atelier™️, Founder & Legacy Aesthete and Christoph Courth, Pictet Group, Global Head of Philanthropy Services.

You can find the Citywealth Forum agenda here https://www.citywealthmag.com/citywealth-forum-agenda/, delegate passes are still available here https://www.citywealthmag.com/citywealth-wp-bookings-2/.

If you are interested in becoming a sponsor, joining one of the forum panels or just find out more about the Forum and other Citywealth products, email Calin Lapuste on clapuste@citywealthmag.com