Why Your Family Needs a Family Governance System

Throughout 2021, The Blum Firm has been sending weekly emails about our latest initiative, Family Legacy Planning. We’ve discussed the compelling statistic that 90% of families fall victim to “shirtsleeves to shirtsleeves in 3 generations.” We have stressed that the single most important action is to hold regular family meetings. Our emails provided suggested topics for family meetings, with particular emphasis on creating a Family Mission Statement. We also shined a spotlight on how to write a “Legacy Letter,” also known as an “Ethical Will.” Most recently, the focus has been on creating an in-house family education program to train heirs to be responsible inheritors. Today, we highlight another important aspect of Family Legacy Planning: creating a Family Governance System.

When we study the best practices of the “ten percenters,” those families who beat the shirtsleeves curse, we learn that they are intentional about creating a successful family. They don’t leave things to chance. As we’ve said before, they understand that “hope is not a strategy.” Over time, as a family grows and evolves, family dynamics becomes more complicated. This is especially true as in-laws join the family, and as siblings and cousins interact. Inevitably, conflicts will arise. Relationships will be strained. This happens in every family, even in the most harmonious ones. Successful families think ahead. They get in front of these stresses by adopting a formal Family Governance System that will guide them through the twists and turns that every family experiences.

In upcoming emails, we will dive deeper into the “how to’s” of family governance. As a hint of what’s coming, be ready to learn more about concepts such as:

  • A family constitution and bylaws
  • A family council
  • Family committees
  • An advisory board of the family’s “go to” outside advisors
  • Determining which family members vote
  • The procedure for making decisions
  • The procedure for resolving conflicts
  • The process for onboarding in-laws

Keeping a growing family operating smoothly and lovingly can be even more challenging than running a business. It’s well-accepted that a business needs a governance systemIt’s even more critical to provide your family that kind of structure. As with everything else when it comes to families, there’s no “one size fits all” governance system. Each family decides what fits them best, but every family deserves some kind of governance system to help them swim through the uncharted waters of family life.

Marvin E. Blum

Happy summer from Marvin Blum and the growing Blum family! I see eleven good reasons here for a family governance system to help us swim through life.