General articles written by David, either on this site or other sites
Q. My child is not performing in their role in the family business / will use their inheritance to support a cause I despise / wants to take over / doesn’t want to take over / doesn’t want to do what I want. What can I do to bring them into line? A. Since time immemorial, parents have been trying to get their children to do what they want, or follow in their footsteps. Which…
Transition Ready In the early days of my billing business, a prospective customer asked me: “what if I was hit by a bus?” This highlighted to me the dependence of the business on me, and I set about making the business “sale-ready”. That didn’t mean that I planned to sell it, rather that if I ever wanted to, I could, because the business would be worth as much without me as with me. That is…
Q: If the world’s two richest men cannot keep their wives happy, what hope do we have? A: No, that’s not a real question – it’s a meme that circulated following the news of the divorce of Bill & Melinda Gates. Many people with wealth realise that money can’t make a wife (or anyone) happy, but that doesn’t stop them trying. In business, sometimes we decide to “throwing money at a problem”. That means directing significant resources…
Q: How do we protect the next generation from blowing our money? A: Stop right there. Whether you have created or inherited the wealth, the language of the question reeks of a power, control and mistrust dynamic. Many families either hang on to their wealth or setup structures to prevent their children from “blowing it” (which is often controlling from the grave). Yes, it’s awkward having discussions about estate planning and family wealth, and who wants to…
Q: How do we tell the kids about our family wealth? A: First and possibly most important point: they already know. By the lifestyle you lead and the people you mix with, your children have already made assumptions about the family wealth. They will also have garnished information on this topic from friends and from public sources. That means in terms of controlling the conversation, you are already well behind, so be aware of what you can and…
Many families struggle with the ‘why’ of their wealth. Defining a philanthropic strategy is a great way for a family to articulate a purpose for their wealth. However, only 20% of families have a formal process for doing so. At the start of COVID, there was concern that financial pressure on families would lead to a reduction in philanthropy. But in a recent survey, 43% of respondents said that the pandemic had not altered the…
[REPLAY] If you couldn’t bear to watch Megan Markle bare her soul to Oprah (or if you couldn’t look away from it, and from the endless commentary that followed), here are two practical things you can actually take from the latest episode of this saga: 1. There are serious challenges to growing up in a wealthy family with a public profile. The weight of expectations is heavy, and finding identity and meaning can be difficult….
When taking young children for a long drive in the car, we would regularly hear them ask “are we there yet?” Children quickly become bored and impatient, and don’t always have a sense of time (especially if they are too young to wear a watch). In families, rising generation family members are wondering “are we ready yet?” to take a position of responsibility or leadership within the family enterprise. They have a very keen sense…
Q. My child (age 20) has no interest in joining the family business. What can I do? A. Very sorry to hear that; unfortunately, your options at this stage in your child’s life are far more limited. Any motivation you might provide for them to join is likely to be extrinsic and therefore may not be enduring. I’m going to defer on this question and discuss when to start preparing successors. By the time they…
Q: We have three non-family board members in their 70s on our family board. How should we handle moving them on? A: The composition of the family board is a careful balance between family members & independent voices, and maintaining regular turnover is very important. Often, families will establish a board with some family members, the family lawyer & accountant, and perhaps some other trusted advisors. But without due attention to the board composition, the group can…
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