Estate Living Digital Publication Issue 5 May 2015 | Page 58

the owner of the family business govern its
relationship with its wealth and its enterprises.
“This mission is often assisted by a family
constitution that captures the wealth of
information, including the family’s vision
and important values, a family employment
policy, an ownership structure and capable
non-family managers who set a standard for
the professional management of the family
enterprise.”

“The desired outcome
is rational economic
and family welfare
decisions that are
not overwhelmed by
traditional family
dynamics,” says
Ratcliffe.

INVESTMENT SAVVY

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“Family governance helps a family business
to manage the challenges of wealth and
succession, as well as navigating, and ultimately
avoiding, the erosion of an entrepreneurial
culture. It is an essential discipline for the longterm well-being of the family enterprise and
overall wealth of a family. It refers to a family’s
ability to optimally discipline and control the
nature of their relationship between each
other and the business in such a way that the
enterprise prospers.”
A family office service such as that offered by
Private Client Holdings will:
1.Facilitate regular meetings and information
sharing between all family members and key
business managers.

2.Establish a solid reporting structure so
that all stakeholders receive complete and
consolidated reporting. This means that
everyone is informed as to how much they
are contributing or drawing from the family
wealth.
3.Conduct independent audits of the business.
4.Develop standard operating procedures for
the family behaviour and/or contributions.
5.Mentor future generations regarding the
values and visions of the business.
6.Provide a third party objective opinion on
business decisions.
7.Maximise tax structures.
8.Assist in setting up solid long-term structures
within which the family and the business may
prosper.

“Many families fail to
successfully govern
both the family and
business relationships
and the impact this
has on businesses and
wealth can be dire.
Although there is no
magical formula to
achieve family unity
and preservation of
wealth, effective
family governance
is pivotal in
preservation and
growth of family
wealth and family
values,” concludes
Ratcliffe.