Sound governance, anchored in family values, is the cornerstone of a resilient and effective family office. Making the right decisions demands clear communication, trust and a shared understanding of the principles and goals of your family or the families you assist.

What is family governance?

Family governance centres on agreed processes for how a family office makes decisions, how changes are implemented, and the roles and responsibilities of individuals within the family and the business. Robust governance should ensure the family office operates in a way that is consistent with its values and long-term objectives, facilitating the successful transfer of wealth across generations.

Why is family governance important?

Family offices often navigate a range of challenges ─ from generational transitions and divergent goals to balancing personal values with business interests. Without a clear governance framework, issues like succession, decision-making and conflict resolution can quickly become sources of friction. 

Establishing a family governance structure sets the foundation for dealing with such matters proactively and efficiently. It provides clarity on roles, responsibilities and processes ─ helping the family preserve unity while adapting to change. Ultimately, strong family governance is not just about structure, it's about strengthening trust, continuity and the shared vision that binds the family together.  

Strong family governance is vital to: 

Family harmony

Family harmony supports healthy financial decision-making, and good decisions further enhance that harmony. A shared commitment to family governance aids communication, builds trust and unites the family around its guiding values.

Transparency

Documented governance rules help to ensure that input from all family members is taken into account in decision-making. Such transparency may be particularly valuable in ensuring younger generations feel included and engaged. 

Succession and legacy planning

Preserving a family's legacy and ensuring a smooth transfer of wealth across generations hinges on clear planning and robust governance  ─ without it, even well-run family offices risk unintended consequences and strained family dynamics.  

Empowering the next generation

Engaging the next generation in governance equips them with the context, capabilities, and perspective needed to understand the family's priorities and navigate the responsibilities of wealth leadership.  

What are the steps to building strong family governance?

Once we understand your family’s values, goals and priorities, we can partner with you to put in place governance structures that serve your unique needs.

Key steps typically include:

• Crafting a family mission statement that clearly articulates your family’s core values and goals. It should be grounded in your family history, yet forward-looking in offering a clear vision for the future you intend to create. The mission statement becomes the foundation for a sound legacy plan.
• Drawing up a family constitution, or a set of family protocols, to explain how the mission statement guides your family office in practice, including in complex and difficult situations. This needs to be uniquely designed to promote the success and continuity of your family, reflecting its vision, composition and geography. Decision-making rules, conflict resolution mechanisms and succession planning are key elements.
• Setting up a family board within the family enterprise sharpens the focus on your family office’s strategic direction and ensures alignment with the broader vision. Consider appointing independent directors to introduce objective insight and reinforce professional standards.
• Assembling a team of experts tailored to your family’s specific needs. At Deutsche Bank Wealth Management, our open architecture model enables us to coordinate seamlessly with leading industry specialists, building governance teams that blend internal and external expertise as required. Insights from our family governance roundtables further enhance our expertise and reflect our dedication to continuous improvement.
• Engaging the younger generation with educational events and opportunities on a junior board. Our NextGen programme features annual educational seminars on finance, innovation and entrepreneurship, held in Europe, California and New York.
• Setting up an ongoing event calendar for regular family meetings and social events. Agreeing how and when meeting agendas will be formulated and shared, as well as ground rules for taking part.

The strength of a family office lies in principled decision-making that reflects the family's values across generations. At Deutsche Bank Wealth Management, we work with family offices or the families that you assist to design governance structures that will help families flourish today and in the future.