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Family Office and the value of good governance before financial strategy
26 June 2024 | Minutes to read: 2

Family Office and the value of good governance before financial strategy

By Andrew Bradley

In a Family Office, addressing family dynamics and establishing good governance should occur before developing or executing on a financial strategy.

Think of establishing the governance framework as laying the foundations that set the family up to safeguard and grow its wealth, execute on an investment strategy and manage any business considerations.

Family Office services are increasingly necessary when a management transition occurs within the family business, or a family is embarking on a multi-generational wealth transfer.

Prudent families, and in particular those that want to enter a multi-generational wealth transfer, should exercise good governance by establishing a family charter, educating children from an early age and aligning them with professional advisers. They should also hold regular family meetings which should continue throughout the transition.

What are the elements of good governance?

We believe good governance encompasses mindset, values, purpose, defined roles and clear processes.

Mindset involves ensuring that the family members are goal-aligned.

Values should be understood and shared by the family members and present in all that the family does, including the way in which it achieves its goals.

Defined roles are critical as they will establish clear boundaries, minimise conflicts and ensure each family member understands what’s expected of him or her.

Clear processes detail how effective decisions are made and can also encompass policies and guidelines that govern different aspects of the Family Office.

Seeking input from everyone creates alignment of the family structure and sets the framework for effective governance. The financial part is easier, the family part – often very difficult, underappreciated and the reason why wealth transition fails.

When governance comes first, families are better placed to deal with their financial and/or business strategies. They will be on the way to achieving unity and alignment, making collective decisions about the family wealth and investment policy and younger generations will be engaged. Roles will be clear and the family’s purpose and decision-making processes will be documented and understood.

Without family alignment, even the best financial strategy will fail, and this alignment is achieved by good governance, which is why we strongly believe that good governance is first and foremost where the value is created

For more information on establishing a governance framework for your Family Office, please contact your local William Buck Wealth Advisor.

Family Office and the value of good governance before financial strategy

Andrew Bradley

Andrew Bradley is a key member of William Buck’s bespoke Family Office team and provides high level advice to select individuals and families with significant assets that require a more sophisticated and tailored approach for managing their assets including investment, philanthropy, family governance and family office advisory services.

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