Chapter 5 Governance, leadership and the Next Generation
In Chapter 1, we saw how external risks relating to the investment and political environment have displaced the internal risks relating to family governance and planning which dominated responses in 2015 and 2018. There is an exception to this sharp shift, however. Failure to engage the Next Generation appropriately has consistently featured in families’ top risks since the Four Pillars of Capital surveys began - and it remained in second place in 2023.
Survey Highlights
Nearly half of participating families have no formal leadership structure, and two fifths do not hold regular, in-person meetings.
Involving professionals in leadership roles is growing in popularity, especially in the Americas.
Most respondents rely on a purely informal approach to equipping the Next Generation for the responsibilities of wealth.
Young people currently face an especially challenging environment for anxiety, stress and overall mental health.
The Stonehage Fleming View
There are many successful models of family leadership to choose from: sharing leadership between family members is not uncommon.
One feature of all successful family governance is clear and effective communication between family members.
A thoughtful approach to supporting the Next Generation - through mentoring, coaching and just being there to listen and understand - will pay rich dividends.
If you do not invest in building emotional intelligence in the family it will cause profound issues.
PERCENTAGE OF US ADOLESCENTS AND ADULTS EXPERIENCING A MAJOR DEPRESSIVE EPISODE IN THE LAST YEAR
Source: Stonehage Fleming
DOES YOUR FAMILY HAVE REGULAR IN-PERSON MEETINGS?
Source: Stonehage Fleming
DOES YOUR FAMILY HAVE A FORMAL LEADERSHIP STRUCTURE?
Source: Stonehage Fleming
Source: Stonehage Fleming
Source: Stonehage Fleming
