Family Office Elite Spring_16

governance standards for the family
office. There are four components
within a governance system:
1. Constitution - the preservation of
family vision and values.
2. Assembly - recurring meetings
and leadership training for the next
generation of wealth.
3. Council - enhancing strategic
effectiveness by using the expertise
of advisory professionals.
4. Process - efficient decisionmaking
and conflict resolution
process.
There are three key decision
methods: principal directed, where
one or two key family members
make all the major decisions;
family board, where 3-6 family
members with a Chair make
the decision formerly, at least,
quarterly; outside directors, who
with the family board make all
the major decisions. Private banks
can assist with wealth education.
This involves implementing
strategies that provide age/skill/
interest-appropriate opportunities
to lead, learn, influence or grow.
This builds family cohesion and
communication. At the individual
level, developments can be
made in financial independence,
internships, understanding how
credit works and appropriate uses,
encouraging saving and budgeting
and understanding the power of
compounding. In terms of continuing
the family legacy, wealth education
can encourage information sharing
within families, using philanthropic
accounts and foundations for
exploring investment strategies
and encouraging collaboration, and
can also provide opportunities for
the senior generation to guide the
family and to share philosophies.
In summary, the private banks
can help enhance the structure
and governance of a family office,
raise the rigour of investment
decision-making and monitoring,
help to build cohesion around the
family philosophy, and develop
the younger generation. The
larger private banks are especially
well-placed to do this, with their
institutional trading platforms,
quality research, and capital
markets expertise.
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FAMILY OFFICE ELITE MAGAZINE