There is much to be said for the ‘benevolent dictatorship’ model of family leadership. However, the demands it places on both the leader and on those being led, are significant. In many cases, that can undermine the chances of family values, family relationships and family wealth being successfully transferred between generations.
Fortunately, there are many alternative models of family governance available – and much experience to learn from. Whilst no two families are the same, we have found that families who identify the need for leadership in all four pillars of capital, as well as understanding the benefits of a shared purpose and effective communication, have the best chance of preserving prosperity through the generations.
Our experience also tells us that a single person is unlikely to be the most appropriate leader in all these areas and that engaging the most appropriate family members, or indeed non-family members where there is a need, can play a crucial role in a successful family governance. Having multiple family leaders also reduces the pressure that one person may feel and is often a useful way of engaging the Next Generation.
Being a successful entrepreneur or born into a successful family can compound the already complex issues around family leadership especially in a world where success is almost always viewed through the lens of financial capital. Leadership can be challenging and lonely. Yet, ironically, being led also brings tests of expectation and perception: it too can be challenging and lonely.
Defining success as a family is therefore an important conversation to have and will encourage the family to discuss the relevance of each of the four pillars of capital. To some, success may indeed be measured in terms of financial outcomes, but for others it may be what you are known for as a family, your contributions to the wider society, or being the ‘glue’ hosting family gatherings and keeping the family unit together.
We believe passionately in supporting families as they define what success and legacy mean to them, search for the most appropriate model of decision-making and leadership for their circumstances, and seek to foster successful generational transitions.
We deliver that support both collectively – by facilitating family meetings, challenging the status quo, and sharing experiences of what has and has not worked for other families in similar circumstances – and individually, particularly for the Next Generation – mentoring, coaching, and just being there to listen and understand.
Find out more about Stonehage Fleming's Governance & Succession Service
