Family governance structure
The International Family Offices Journal
Vol. 5 - Iss. 1 pp. 27–33
Next we have a detailed treatment of family governance structures, beginning with a case study of a family in Mexico, by Guillermo Salazar. This real-life family showed how a lack of communication between family members increased the conflicts they faced. He observes that so often the efforts to create moments of coherent conversations about the shared legacy often end up in heated discussions between parents and children, who have a different perspective of the same truth. He focuses on generational transitions. Realising that the first generation who created the wealth through a family business was a classical entrepreneur - but that might not be the case for the second generation. His advice to the second generation is to be aware of its strengths and weaknesses and, rather than attempting to be exactly like the founder, to find its own ways to contribute to the family wealth. For the transition from the second to the third generation he promotes the use of a variety of family governance structures, encouraging the second generation to lead the third generation. He closes with the details of the governance structures the Mexican family created. These included a family council and a family protocol/constitution. Guillermo includes the options for addressing conflict resolution including mediation and arbitration. He closes with the success of the case study family who used their governance structures to increase the harmony of their heritage, its preservation and transmission to future generations.