David’s Articles

David has been writing and publishing since 2006.  

This post was written and published prior to September 2023 when David and his prior firm, Family Capital Strategy, merged with Greycourt.  Views expressed reflected David’s personal views at the time and do not necessarily reflect the views of Greycourt.  Posts and information may be out of date and should not be relied upon for investment advice.

Placing The Family and Its Governance on the Same Plane

May 18, 2023 | Family Wealth

brown concrete building

In the spring of 2001, as a high school senior, we went on a class trip to Italy.  It was an amazing trip where we were able to see a large portion of the country – more of a jet ski approach vs. scuba diving – though definitely age appropriate.

Like any group of tourists traveling aboard, there was plenty of shopping to be done in the shops lining the streets of Florence and canals of Venice.  My classmates, being typical American teenagers, bought many of the usual suspects – leather jackets, etc. 

I returned with 2 important possessions – a beautiful leather briefcase and a Montblanc fountain pen – not typical 18 year old fodder.  I had reasons for each tied to stories from my upbringing.  A leather briefcase was a gift my mother had purchased for my father on a trip once.  My grandfather himself was a collector of fountain pens and derived great pleasure in their use.

While each were purchased with great enthusiasm, I actually sold both on e-bay within 5-7 years or so because I was not using them.  Fast forward to today – I have a wonderful briefcase I use and enjoy.  I received a fountain pen as a treasured gift that I use weekly to write notes with. 

So what was the issue?  

I would argue that while the desire was reasonable, the issue was the timing.  As someone that has been acting 40 for most of his life, I understood the ultimate appeal and intuitive use for each item.  The challenge was that by the time I would actually need them, my tastes had evolved.

In a similar way, legacy families can also fall prey to a similar dynamic with their own structures.   As family governance work has grown in popularity and more advisors are using it as a tool in their own advisory practices, I have begun to see families where the governance structure is so far advanced that it far outpaces the relational maturity of the family.

So for example, I met a family once which told me that it had a family council in operation.  They were worried though that the future generations of the family would not be able to participate in the council because their bylaws required a college degree to participate, and not all of the next gen had one.  

Obviously talent identification and management is important and sensitive work for a family.  Having well trained members of the family for service is certainly important.  But in this scenario, the family members I spoke with were G1 and the only other family members alive were their twentysomething children (aka G2).  So basically mom and dad had written bylaws that didn’t partipcate their own children from serving! 

This is a great example of the heart being in absolutely the right spot, but the family itself not being ready for the governance dynamic in play.  It is possible for the governance structure of the family to far surpass the maturity curve of the family.

What to do then?  I would argue that it is important to return to first principles – namely what is the purpose of family governance to begin with?  Simply put, family governance is a tool used to keep a family relationally engaged for generations to come.  If that is the purpose, form should follow function.  Family governance should pursue a minimum effective dose to achieve the necessary outcome.  


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Nashville, TN