Family governance is not corporate governance
Corporate governance protects outsiders such as shareholders and regulators from the people running a company. Family governance is the opposite: an internal tool a family builds to stay in control of what it owns. Applying the corporate model to a family office makes governance serve the structure rather than the family that built it.
Corporate governance and family governance share a word and almost nothing else. One protects outsiders. The other keeps a family in control of what it owns. Confusing them is how families lose what they built.
Corporate governance and family governance share a word. They share almost nothing else.
One was built for companies. It answers outward, to people who have a stake in the business but do not control it: shareholders, regulators, the market. Its job is to protect those outsiders in a business they do not run. Control from the outside in.
Family governance runs on the opposite logic. The family builds it, for itself, to stay in control of what it owns. A purely internal tool. A family answers to no one but itself.
Apply the corporate model to a family, and governance slowly begins to serve the structure instead of the family. The office grows. The experts multiply. The family, the owner, loses sight of what it built.
Same word. Two different things. Mistaking one for the other is how families lose what they spent a lifetime, or several, building.
In the family offices we support, it is a recurring pattern. So my partners at Westwick and I put it down in writing. We hope it sparks the same intense debates we had when we tested it on our own families.
Further reading: a practical guide to family governance — Westwick's white paper on governing single family offices.
← Back to Insights & Knowledge