Why Family Business Governance Can’t Be One-Size-Fits-All

According to Inc., the growing field of family enterprise governance has attracted numerous consultants, bankers, wealth managers, brokers, attorneys, and psychologists eager to provide standardized advice. This commoditization of solutions leads families to believe they need specific governance “products” regardless of their unique circumstances, creating a “check-the-box” approach where families play “governance bingo” by copying what other successful families do. The problem intensifies when families see others establishing family offices and assume they need the same structure, mirroring the concept that there’s no such thing as universal solutions in complex systems. This standardized approach fails to account for each family’s unique dynamics and enterprise requirements.

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The Customization Imperative

What most governance consultants miss is that family enterprises operate at the intersection of three distinct systems: the family system, the business system, and the ownership system. Each has its own values, priorities, and success metrics. A governance structure that works for a third-generation manufacturing business with 50 family shareholders won’t suit a first-generation tech startup with three siblings at the helm. The complexity multiplies when you consider cultural backgrounds, geographic dispersion, and the varying levels of family involvement in operations. Successful governance requires mapping these overlapping systems and designing structures that address the specific tensions and opportunities unique to that family constellation.

The Hidden Costs of Standardization

When families adopt generic governance frameworks, they often encounter several unanticipated problems. First, standardized policies can create artificial constraints that limit strategic flexibility. Second, they may fail to address the actual sources of family conflict or misalignment. Third, the implementation of unnecessary governance “products” adds administrative overhead without corresponding value. I’ve seen families spend millions establishing sophisticated family office structures when a simple shared services arrangement would have sufficed. The real danger isn’t just wasted resources—it’s that these standardized approaches can actually exacerbate family tensions by forcing compliance with systems that don’t reflect their values or needs.

Building Truly Effective Governance

The most successful family enterprises I’ve studied take a principles-based rather than rules-based approach to governance. They start by clarifying their core family values and strategic objectives, then design governance mechanisms that support those priorities. This might mean creating unique decision-making processes for different types of investments, or developing family assemblies that serve both governance and relationship-building functions. The key is treating governance as an evolving system rather than a static set of policies. Regular governance reviews—separate from business strategy sessions—allow families to adapt their structures as the enterprise and family mature. This living approach to governance acknowledges that what works during leadership transition periods may need adjustment during stable growth phases.

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Navigating the Consultant Landscape

Families seeking governance assistance should be wary of providers offering pre-packaged solutions. The most valuable advisors are those who begin with deep discovery processes—often spending weeks understanding family dynamics, business challenges, and ownership structures before making recommendations. Look for professionals who ask more questions than they answer and who demonstrate experience across multiple family enterprise scenarios rather than pushing a single methodology. The best governance advice helps families develop their own capabilities rather than creating dependency on external experts. This approach builds family governance literacy and ensures the system remains responsive to changing circumstances.