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Managing Director, Head of Family Governance
Managing Director, Head of Family Governance
10 minute read
Family governance is the framework that directs how a family makes decisions together. Governance looks different for each family and plans are tailored to individual needs and circumstances. In families with a business or significant shared assets, governance often addresses three interconnected areas: ownership, family, and business. In other families, these may be adapted to focus on shared assets, philanthropy, or family culture. Ultimately, family governance creates clarity, reduces conflict, and ensures wealth and legacy are stewarded with intention.
Progressive governance frameworks, such as those we use at Cresset, go beyond financial oversight. We help families integrate human capital (skills, education, values), social capital (relationships, networks), and cultural capital (traditions, identity) alongside financial capital. This holistic approach acknowledges that thriving families invest in much more than money—they invest in their people and their purpose.
Family governance is the system of principles, structures, and practices that guide how a family manages wealth, shared assets, and interpersonal dynamics. It establishes alignment around shared purpose, values, and goals, while providing practical tools for decision-making and communication. For some families, this may take the form of family constitutions or councils; for others, it may center around defining how family members engage with wealth and opportunities across generations.
Example: A family with multiple real estate holdings may develop governance structures that define how decisions are made about acquisitions, sales, and distributions. Another family might use governance to clarify how family members can access shared resources to pursue their individual goals, while balancing the long-term needs of future generations.
For families who own an operating business, governance often relies on the Three-Circle Model, which was developed through a Harvard research study. It provides a framework for understanding family businesses by highlighting the overlapping dynamics of:
Example: In a multigenerational manufacturing company, the Three-Circle Model can help distinguish between family members who are shareholders, those actively employed in the business, and those not directly involved.
For HNW and UHNW families without an operating company, other models may be more relevant, such as:
Example: A family may create guidelines for how wealth can be accessed to support education, entrepreneurship, or home ownership, while setting clear expectations around sustainability for future generations.
High-net-worth families often experience increased levels of interdependence and face complex challenges: differences in expectations across generations, diverse financial structures, and competing values. Governance provides:
Example: Without governance, siblings inheriting a vacation property may disagree about usage and expenses. With governance policies in place, expectations are clarified and disputes minimized.
A family constitution documents shared values, vision, decision-making processes, and succession principles. It provides continuity and clarity for future generations.
Example: A constitution might outline how family members can responsibly request funds for personal pursuits—such as education, starting a business, or travel—while maintaining safeguards for preserving wealth long term.
A family council serves as a representative body that helps oversee governance, coordinate education, and set family policies.
Example: A family council may establish clear processes for supporting members with career coaching or mentorship opportunities, ensuring fair access without creating entitlement.
A family assembly includes the broader family, often spanning multiple generations, and provides a forum for communication, connection, and shared visioning.
Example: An annual family assembly may include conversations around evolving definitions of success, discussions on how to balance individual aspirations with collective responsibility, and updates on shared resources.
A family office manages not only investments but also facilitates governance, philanthropy, and education. At Cresset, our family office services often include family retreats, rising generation programs, and curated support for navigating wealth.
Example: A family office may design frameworks that help family members access capital for ventures aligned with family values, while maintaining structures that ensure fairness and accountability.
For families with businesses, boards add structure and independent oversight, ensuring alignment between family priorities and enterprise strategy.
Succession planning ensures continuity of leadership, whether for a business, a family office, or shared family initiatives. It involves preparing successors with education, mentorship, and structured opportunities for leadership. When it comes to any succession planning, the process is often more valuable than the policies created. It is important to bring all relevant voices to the table in an authentic yet efficient way.
Example: A family business may invite younger family members to shadow senior leaders before a formal transition, ensuring they feel both prepared and heard. In another case, a family may host structured discussions to align expectations about how leadership roles in family councils or philanthropy committees are chosen.
For complex family enterprises, Cresset partners with trusted experts to guide succession strategy.
Governance policies are the family’s “operating manual.” Common policies include:
Example: A policy might establish criteria for family members to request capital for ventures, ensuring that opportunities are accessible while protecting the family’s financial future.
Cresset facilitates the creation of these policies to ensure families operate with fairness and foresight rather than ad hoc decisions.
At Cresset, we believe governance is not only about structures but also about investing in multiple forms of capital:
Example: Families may design mentorship programs where older generations support younger members in defining success or create storytelling traditions to reinforce resilience and identity.
When families cultivate all four types of capital—financial, human, social, and cultural—they create sustainable legacies that extend well beyond money.
Families often seek guidance to design and implement governance systems. At Cresset, we act as facilitators, educators, and coaches, tailoring governance to each family’s culture and goals. For highly complex needs—such as family business governance or succession tied to ownership—we work with trusted partners to ensure specialized expertise is available.
Example: For a family navigating how to balance individual financial requests with collective goals, we may guide conversations that lead to clear policies, while engaging external experts for technical design when needed.
The Johnson family illustrates how governance can bring clarity across multiple dimensions. The family includes three siblings who inherited their parents’ small but growing manufacturing business, alongside a family foundation established a generation earlier. Over time, questions emerged: Who should lead the business? How should philanthropic commitments be managed? And how could younger family members access wealth in ways that aligned with their own goals?
Through a structured governance process, the Johnsons created a family constitution that clarified roles in the business, established a family council to oversee philanthropy, and developed guidelines for how family members could request support for education, entrepreneurship, or personal pursuits. Importantly, the family engaged in facilitated conversations about the purpose of their wealth and what a successful life meant to each member. For one, success meant building a career outside of the family enterprise; for another, it meant stewarding the family foundation’s impact; for the youngest, it meant pursuing entrepreneurship with family backing.
By addressing business, philanthropy, and individual purpose in an integrated governance framework, the Johnsons found a path forward that honored their shared legacy while empowering each member to define and pursue their own vision of success.
What are the principles of family governance?
The principles of family governance include shared purpose, transparency, fairness, and accountability. These ensure that decisions are made with integrity and clarity.
What is governance in a family office?
Governance in a family office refers to the structures and processes that guide decision-making around investments, education, philanthropy, and family engagement.
What are the different types of family governance?
Common structures include family constitutions, family councils, assemblies, and advisory boards. Each serves different functions depending on family needs.
What is an example of a governance structure?
A governance structure could be a family council tasked with designing policies for career development and philanthropy participation, or a constitution outlining shared values and conflict resolution processes.
What is family governance consulting?
It is the process of working with experts to design and implement governance frameworks, policies, and education tailored to the unique needs of each family.
Family governance is not a one-size-fits-all approach. Whether guided by the Three-Circle Model for business-owning families, or frameworks like Family–Assets–Legacy for wealth-only families, governance is about creating clarity, alignment, and shared purpose. When paired with investments in human, social, and cultural capital, governance provides families with the tools to thrive across generations.
At Cresset, we help families navigate governance, education, and philanthropy with a focus on aligning wealth with values and fostering enduring impact. To explore how governance can strengthen your family, schedule a call with our team.
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