Family Office Governance: Rules, Oversight and Accountability
Richard C. Wilson records the talk in Liechtenstein while there to speak at a family office conference.
Richard C. Wilson explains family office governance as a working structure for rules, review and accountability. He says the subject does not receive enough attention and records the short talk while writing a book about family offices. He describes the governance board as an internal watchdog, with a role in keeping the office's decisions aligned with its responsibilities to clients. He covers practical areas where oversight can apply, from routine decisions to changes in leadership.
In this video: Richard C. Wilson (Family Offices Group speaker)
What they said
- Wilson on service standards. Wilson says a governance board should review a proposed change in the office's minimum assets under management. He gives the example of a family office moving from requiring 50 million to 5 million, and says the board should guard against lowering service quality for existing clients. (at 1:52)
- Wilson on board membership. Wilson describes a board with one or two family office executives, members of the advisory board and outside executives with governance experience. He says that experience may come from corporations, wealth management or family offices. (at 2:21)
- Wilson on approval rules. Wilson says policies should define who approves a decision and when more than one person must sign off. For a new fund manager, he suggests review by the advisory board and approval by the family office CEO, as well as the portfolio manager. (at 3:19)
- Wilson on ethics policies. Wilson says the governance board should put an ethics policy in place if the office does not already have one. He describes it as a guide for decisions and business morals. (at 4:17)
- Wilson on leadership changes. Wilson says the board should take a hands-on role when a portfolio manager or CEO is replaced. That includes overseeing the exit and the process for hiring a successor. (at 5:12)
In their words
"it might help you attract even better talent for the same amount of money to your family office"
"it shows you're serious about doing things right and you have a long-term bias towards your family Office business"
Why it matters if you are building or preserving great wealth
Wilson's fund manager example gives the board a check on personal ties: a portfolio manager's brother would also need review from the advisory board and CEO. That approval chain can shape who gets considered to manage client money.
From Richard's exclusive Billionaires.com interviews
Lessons from Richard C. Wilson's one-on-one interviews, as published on each interview page.
- Anu Aga: Focus on one main cause. Her family found its giving more satisfying and impactful once it chose primary education for the underprivileged in India.
- Binod K. Chaudhary: Never chase a deal out of desperation. Stay cool and look at every part of the deal. Have your advisers and your finance team review it critically. Your counsel should review it too.
- Larry Connor: Learn from every mistake. Larry's team owns its failures and makes no excuses. They learn, change quickly, and keep getting better.
See the data
Frequently asked questions
What client liquidity commitment does Wilson mention?
He describes a promise that investments can be unwound within two months notice, with assets sold and capital returned within the stated timeframe.
What does Wilson mean when he says the board needs teeth?
He says its head should be able, to some degree, to tell the family office CEO or executive director what to do, or make sure an issue receives serious consideration.
Sources
Quotes are copied from the video captions and checked against the transcript. Timestamps link to the moment in the video. General information only, not legal, tax or investment advice.