Gary Hirschberg, J.D., CTFA
CEO & Founding Member
As family offices grow in complexity and responsibility, the need for structured governance becomes increasingly important. The many benefits that a board of directors affords a private company can also be additive to a family office. A strong board helps your family office run smoothly and stay on track with your long-term goals. Creating a board of directors marks the turning point that a family office has moved from just managing wealth to governing it. This highlights a family’s commitment to stewardship and helping future generations thrive.
Successful entrepreneurs who are at the helm of their family office are responsible for critical personal and business decisions that go beyond the advice of family and friends. The complexities of investments, business, taxes, estate planning, philanthropic initiatives and the interplay of family dynamics demand a more formalized approach.
A family office board of directors should be composed of a group of trusted advisors with professional specific expertise and experience. They are available to help during times of both opportunity and challenges. The board acts as a compass, guiding the family office through the evolving landscape of financial, business, and personal matters.
Establishing Your Family Office Board
A family office board should be established with a clear understanding of the family’s values and the skill sets required to achieve its financial and personal missions and objectives.
The board composition should include a select number of trusted individuals. The number of board members should be enough to share different views and perspectives but not too many to slow down discussions and decisions. An unwieldy board can lead to cumbersome structures and dilution of accountability.
Whether a family member or an independent advisor, the collective wisdom should strengthen the family office with strategic insights necessary to guide confident decisions.
Navigating the Generational Handoff
A key function of the family office is to ensure that the legacy is passed on from one generation to the next. A well-orchestrated transition necessitates candid and respectful dialogues within the family office board. The next generation of the family’s innovation and risk tolerance should harmonize with the old guard’s prudence and wisdom. The board plays a pivotal role in ensuring that the vision and standards of the family office are rigorously maintained across generations.
Final Thoughts
No playbook, no matter how meticulously crafted, can insulate a family office from change. An experienced board of directors can help a family stay at the forefront and navigate evolving wealth, legal, personal, and business changes and challenges. They should embrace the family’s values and take advantage of innovative methodologies and technology to help pursue and achieve their goals.
If you’re considering establishing a board for your family office, Aaron Wealth Advisors is here to help. We can provide the guidance and support you need to create a board that adds value and drives success. Reach out to learn more.