Q/A: Perspectives on Family Governance
A Q&A with Lowenhaupt Global Advisors
Charles A. Lowenhaupt, Chief Executive Officer, Sean Cortis, Director – Australia Office and Erik Halvorssen, Director – Miami Office
Q: What do you mean by “Governance” in the family wealth context?
Q: What are the challenges to designing “governance” programs?
Q: How does a family achieve harmony and legacy?
Q: What is the role of the patriarch or matriarch in the design of governance structures?
Q: What do you advise with respect to issues raised over and over again: the age of engagement, the involvement of in-laws, the role of the patriarch or matriarch, etc.?
Q: How do families preserve their history and culture, yet also adjust to changing conditions and social norms over generations?
AJR: What do you mean by “Governance” in the family wealth context?
LGA: The term itself has many of the meanings used in corporate and business contexts. However, we have found that the best way to consider “governance” is by starting with the goals to be achieved. in other words, governance is not an end in itself; it is a means to an end.
Whether in Boston, Beijing, Bogota, or Brussels, patriarchs and matriarchs have two thoughts first and foremost about their wealth: Harmony and Legacy. Sound process and framework for governance ensure both and achieve the ultimate goal: freedom of the burdens of wealth and an opportunity for individuals to live life on their own terms.
Disciplined systems and processes, clearly defined roles, and well-designed deliberative infrastructure allow a family to move beyond the inherent family dynamics of dysfunction and into harmonious relationships around the family wealth and the family culture. Sound business practices – treating the management of family wealth as a “business” – are the tools needed to keep the family wealth over generations and to avoid the very shirtsleeve to shirtsleeve loss of wealth (a concept in every culture but expressed differently in each).