by Dennis T. Jaffe, PhD (2013) | Summary :

The article The Journey Towards Governance for a Family Enterprise explains how wealthy families can build governance systems that support both family relationships and shared business or financial ownership.

Jaffe explains that founders and inheritors often see wealth differently. Founders usually value control, risk-taking, and business creation, while inheritors often struggle with purpose, identity, responsibility, and how to participate meaningfully in the family enterprise.

The article highlights three important pathways for long-term family success: nurturing family connection, stewarding family enterprises, and cultivating human capital in the next generation. These pathways help families build trust, clarify roles, prepare future leaders, and reduce conflict.

Jaffe also emphasizes the importance of family councils, family constitutions, shared values, education programs, philanthropy, and clear policies around ownership, employment, decision-making, and succession.

In conclusion, the article argues that legal and financial structures alone are not enough. A family enterprise can thrive across generations only when the family actively develops communication, governance, shared purpose, and next-generation readiness.

This article was written a decade ago. It presents several models and tools that link together as the work to be done as a business family succeeds across generations. They outline the complex tasks that make up the hybrid family/business entity. In the years since, I have been able to validate, extend and integrate them into a generative model, meaning continually wealth-creating, family enterprise.

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