Family governance is actually a process, platform or structure to educate, mentor and facilitate communication between family members of a business family and also provides a forum for constructive discussions, problem solving and decisions about how the family members interact with each other and the family business.
The birth of a formal family governance dialogue can be attributed to the Three-Circle Model of the Family Business System that was developed by Renato Tagiuri and John Davis at Harvard Business School (HBS) in 1982. The model represents three interdependent and overlapping systems in a family enterprise: Family, Ownership and Business.
For a family business to function effectively over time, each system must understand how to interact with and support the other systems. In addition, people within each system should appreciate which decisions are theirs to make. This interaction, support and decision making is also called as Governance.
Some key discussions while creating a governance platform:-