Indian ultra-high-net-worth (UHNW) families face a delicate balance: preserving legacy while embracing change. Founders envision their heirs continuing the family business, yet younger generations, shaped by new opportunities, may pursue different paths. This shift raises concerns—fragmentation, loss of entrepreneurial spirit, and fading unity.
Globally, successful families navigate these transitions through open dialogue, structured governance, and education. Family meetings foster alignment, governance ensures clarity, and education prepares future leaders. Even smaller businesses benefit from governance to prevent conflicts and streamline decisions. Indian families can learn from their Asian and European peers, where governance isn’t just structure but a tool to sustain both wealth and relationships said Lim Ping Ping, Vice-Chairwoman, Global Family Wealth Member, and LGT Group APAC Executive Board Member.
Edited excerpts:
In your experience, what are the key challenges UHNW families face when transitioning wealth across generations?
Most UHNW families have wealth originating from family-founded businesses. The founders of these businesses hope for their family members to continue to work in the family business - recalling the sweet unity forged through all in the family working together to get a business up and growing. Yet succeeding generations in the family may wish to pursue other equally meaningful vocations and passions - having been encouraged along the way by their parents and grandparents to access the best education and best opportunities to find their best selves. The elder generations worry about fragmentation and lack of cohesion, and in some families, a concern that the entrepreneurial spirit may be lost. Family governance devices such as family meetings and assemblies are structured ways for families to find commonality through shared values and learn how to come together to make meaningful decisions in an orderly way. For families with founder generations who bless their families with their own longevity, much is asked of this generation to lead - once again - in preparing for these transitions.
What best practices have you observed globally for preparing next-generation leaders for wealth stewardship?
Many families with a legacy of entrepreneurial success and wealth employ comprehensive strategies to prepare the next generation for the responsibilities of wealth stewardship. Their approaches often revolve around best practices in areas such as communication, governance and education.
Communication plays a crucial role in family wealth planning. Through regular family meetings and gatherings, family members can engage with each other and have a better understanding of each other’s expectations and objectives. Such family meetings are a good platform for family members to discuss goals, impart family values and instil a sense of responsibility among the younger generation. Recognising the importance of governance, many successful families implement formal governance structures, where they have family constitutions that define clearly the roles and responsibilities of the family members, the rules for succession, as well as the principles that guide their business and philanthropic activities. Education is another important element in preparing the next generation for wealth stewardship. Some of the best practices include providing a blend of formal education and practical experience. From a young age, family members are encouraged to pursue higher education in fields related to finance, business, and law.
Governance structures are often seen as more relevant to larger businesses. How can smaller family businesses benefit from formal governance frameworks?
Smaller family businesses may be less formal in the way decision-making is made as there may be some key family members holding the decision-making powers to take the business forward. This informality may be prized as these businesses may be quite agile, adaptive and fast in adjusting to challenges or taking up opportunities arising.
Some governance structures would however be suitable even in such a set-up because as the business grows larger and more staff joins the organisation, the lack of structured ways to communicate and make decisions together may bring larger risks.
Ultimately, it is important to strike a balance and avoid overburdening the business with excessive governance processes that may hinder effective operations.
One way to look at a more structured environment as a family working together in a family business is to consider when family members meet, are they meeting as Board members or shareholders or is it a Patriarch CEO receiving a proposal from his son in his capacity as the leader of a business unit. We have seen too many examples of Asian families who do not distinguish between their roles in a family system from that of a business system creating confusion over time on key decisions made by the family, which confusion translates into disputes when suddenly a key founder generation has lost capacity or otherwise has passed.
What lessons can Indian family businesses learn from their counterparts across Asia and Europe?
Families, especially business-owning families who have been successful in transitioning wealth through generations and transforming their family capital share some commonalities. One of these is the usage of family governance devices (beyond wealth structuring) to keep unity in goals, values, and cohesion. We share with our client families how families use these structures and their family governance planning so that these are not just good documents written to be admired and then placed in a drawer for posterity. Families may appreciate that ultimately families need to do the work, not just rely on a document, to create clarity and cohesion. Family charters should be reviewed - these are living documents in the sense that families will evolve so too should such documents.
Globally, successful families navigate these transitions through open dialogue, structured governance, and education. Family meetings foster alignment, governance ensures clarity, and education prepares future leaders. Even smaller businesses benefit from governance to prevent conflicts and streamline decisions. Indian families can learn from their Asian and European peers, where governance isn’t just structure but a tool to sustain both wealth and relationships said Lim Ping Ping, Vice-Chairwoman, Global Family Wealth Member, and LGT Group APAC Executive Board Member.
Edited excerpts:
In your experience, what are the key challenges UHNW families face when transitioning wealth across generations?
Most UHNW families have wealth originating from family-founded businesses. The founders of these businesses hope for their family members to continue to work in the family business - recalling the sweet unity forged through all in the family working together to get a business up and growing. Yet succeeding generations in the family may wish to pursue other equally meaningful vocations and passions - having been encouraged along the way by their parents and grandparents to access the best education and best opportunities to find their best selves. The elder generations worry about fragmentation and lack of cohesion, and in some families, a concern that the entrepreneurial spirit may be lost. Family governance devices such as family meetings and assemblies are structured ways for families to find commonality through shared values and learn how to come together to make meaningful decisions in an orderly way. For families with founder generations who bless their families with their own longevity, much is asked of this generation to lead - once again - in preparing for these transitions.
What best practices have you observed globally for preparing next-generation leaders for wealth stewardship?
Many families with a legacy of entrepreneurial success and wealth employ comprehensive strategies to prepare the next generation for the responsibilities of wealth stewardship. Their approaches often revolve around best practices in areas such as communication, governance and education.
Communication plays a crucial role in family wealth planning. Through regular family meetings and gatherings, family members can engage with each other and have a better understanding of each other’s expectations and objectives. Such family meetings are a good platform for family members to discuss goals, impart family values and instil a sense of responsibility among the younger generation. Recognising the importance of governance, many successful families implement formal governance structures, where they have family constitutions that define clearly the roles and responsibilities of the family members, the rules for succession, as well as the principles that guide their business and philanthropic activities. Education is another important element in preparing the next generation for wealth stewardship. Some of the best practices include providing a blend of formal education and practical experience. From a young age, family members are encouraged to pursue higher education in fields related to finance, business, and law.
Governance structures are often seen as more relevant to larger businesses. How can smaller family businesses benefit from formal governance frameworks?
Smaller family businesses may be less formal in the way decision-making is made as there may be some key family members holding the decision-making powers to take the business forward. This informality may be prized as these businesses may be quite agile, adaptive and fast in adjusting to challenges or taking up opportunities arising.
Some governance structures would however be suitable even in such a set-up because as the business grows larger and more staff joins the organisation, the lack of structured ways to communicate and make decisions together may bring larger risks.
Ultimately, it is important to strike a balance and avoid overburdening the business with excessive governance processes that may hinder effective operations.
One way to look at a more structured environment as a family working together in a family business is to consider when family members meet, are they meeting as Board members or shareholders or is it a Patriarch CEO receiving a proposal from his son in his capacity as the leader of a business unit. We have seen too many examples of Asian families who do not distinguish between their roles in a family system from that of a business system creating confusion over time on key decisions made by the family, which confusion translates into disputes when suddenly a key founder generation has lost capacity or otherwise has passed.
What lessons can Indian family businesses learn from their counterparts across Asia and Europe?
Families, especially business-owning families who have been successful in transitioning wealth through generations and transforming their family capital share some commonalities. One of these is the usage of family governance devices (beyond wealth structuring) to keep unity in goals, values, and cohesion. We share with our client families how families use these structures and their family governance planning so that these are not just good documents written to be admired and then placed in a drawer for posterity. Families may appreciate that ultimately families need to do the work, not just rely on a document, to create clarity and cohesion. Family charters should be reviewed - these are living documents in the sense that families will evolve so too should such documents.
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