Family governance: building a framework for the future
According to the Family Business Institute¹, around 30% of family businesses survive into the second generation, 12% into the third and only 3% into the fourth and beyond. To address the long term challenges of continuity, intergenerational transition and the preservation of family wealth, establishing a family governance framework can play a crucial role.
We explore this topic with Petra Besson, Head of ESG Investments², and Elisa Thollet, Wealth Engineer at Societe Generale Private Banking Luxembourg, who support families throughout this process.
Why has family governance become such a key issue for families today?
Families now operate in an increasingly complex environment. They are often international, with expectations that differ across generations, and they must manage highly diversified assets and wealth. While financial management remains essential to preserving family capital, it can only be fully effective if it is anchored in a clear, legitimate and collectively shared organizational structure. Implementing a family governance framework helps provide this structure.
In practice, this approach remains relatively uncommon. A study conducted by Bpifrance showed that in 2023, 76% of family owned SMEs and mid sized companies³ had no formal governance mechanisms in place, such as a family council or a family charter. With generational transfer becoming an increasingly urgent topic—one out of four business leaders is now over 60³—more and more families are beginning to engage in this conversation.
What exactly do we mean by family governance?
Family governance encompasses the mechanisms, rules and processes designed to facilitate decision making, strengthen cohesion and ensure the continuity of family wealth across generations.
It typically takes shape through a family charter, a foundational document that allows families to:
-clarify shared values,
-define rules for managing assets and wealth,
-preserve and transmit knowledge,
-plan succession.
How is a family charter developed?
Drafting a family charter is both a structuring and unifying exercise. The process follows several key stages. It begins with an initial phase of listening and assessment through individual interviews to identify expectations, challenges and priorities. These are followed by family workshops that provide a space for open dialogue about long term values and objectives, as well as very practical discussions on roles, commitments and operating rules.
It is essential for the charter to be validated collectively and reviewed regularly. The document should also be integrated into the family’s governance tools and translated into practice. For example, it may lead to the creation of a philanthropic framework, the organization of a family art collection, the definition of an investment policy or the establishment of governance bodies that include younger generations. The entire process can take from several weeks to several months.
What do you take away from supporting families in this process?
Involving an external facilitator helps create spaces for intergenerational dialogue. This neutral third party can ease communication, avoid misunderstandings and defuse potential conflicts. They help surface shared priorities and convictions and assist the family in formalizing its vision for the future.
A family charter is a tangible tool whose effects are felt from the moment it is written and continue over time. It forms the foundation of family governance, helping create consistency across all decisions. This consistency represents a genuine asset in ensuring the long term preservation and transmission of both the family’s tangible and intangible heritage from one generation to the next.
Sources
1. Family Business Association - Letting Go of the Reins, June 2022
2. Investments incorporating environmental, social, and governance criteria
3. Les entreprises familiales en France : Une étude révélatrice de Bpifrance Le Lab - IRCE - Institut Régional des Chefs d'Entreprise (French only)
DISCLAIMER :
This content, being of an advertising nature, has no contractual value. It is neither intended to provide an investment service such as investment advice, nor any related investment service, nor advice on arbitrage, nor legal, accounting, or tax advice from Société Générale Private Banking France (hereinafter "SGPB France"), which therefore cannot be held responsible for any decision made by an investor solely based on its content. SGPB France does not undertake to update or modify it.
Before making any investment decision, please review the detailed documentation of the service or product considered, notably the information related to associated risks, and consult your legal and tax advisors. If the content is accessed by a non-French tax resident, they must ensure with their legal and tax advisors that they comply with the legal and regulatory provisions of the relevant jurisdiction. It is not intended to be distributed in the United States, nor to a US tax resident, nor to any person or in any jurisdiction where such distribution would be restricted or illegal.
Société Générale has implemented a conflict of interest management policy. Société Générale Private Banking France has put in place (i) a complaints handling policy for its clients, available upon request from their Private Banker or on its website (https://www.privatebanking.societegenerale.com/en/claims/) and (ii) a personal data protection policy (https://www.privatebanking.societegenerale.com/en/personal-data-protection/). At any time and free of charge, you have the right to access, rectify, restrict processing, erase your data, and object to its use for commercial prospecting purposes by contacting our Data Protection Officer by email (protectiondesdonnees@societegenerale.fr). In case of dispute, you may file a complaint with the French Data Protection Authority (CNIL), the supervisory authority responsible for ensuring compliance with personal data obligations.
This document is issued by Société Générale, a French bank authorized and supervised by the Autorité de Contrôle Prudentiel et de Résolution, located at 4 Place de Budapest, 75436 Paris Cedex 09, under the prudential supervision of the European Central Bank ("ECB") and registered with ORIAS as an insurance intermediary under number 07 022 493, orias.fr. Société Générale is a French public limited company with a share capital of EUR 939,654,993.75 as of 23 February 2026, whose registered office is located at 29 boulevard Haussmann, 75009 Paris, and whose unique identification number is 552 120 222 R.C.S. Paris (ADEME FR231725_01YSGB). More details are available upon request or on www.privatebanking.societegenerale.com/. This content may not be communicated or reproduced in whole or in part without prior written consent from Société Générale Private Banking France.
At the heart of the technological and energy revolution, rare metals have become a key strategic lever for supporting...
In a world in constant motion, where economic, social, and technological transitions are redefining business models,...
There seems to be an apparent contradiction between “transforming” money into lead and the ability to sell several...
In a context marked by declining interest rates, easier access to financing, and a recovery in transactions, the outlook...