What governance charters should define the roles of family members and outside advisors?
Common documents include a family constitution, family council charter, family office or board charter, and committee charters for material investment, risk, audit, compensation, or philanthropy functions. Each should define decision rights, membership, appointments, conflicts, reporting, meetings, and how family members and outside advisors work together.
1. Family constitution or family charter
This document records the family's shared rules. It can describe values, ownership principles, family office goals, participation expectations, employment standards, education, succession, conflict handling, communication, representation, and review procedures. It can also explain how the family office works with family members, trustees, holding structures, and trusted advisors. Taylor Wessing
2. Family council charter
The council provides a forum for family matters. Its charter should state who may serve, how members are selected, term limits, the chair's duties, meeting frequency, voting or consensus rules, and matters reserved for the wider family or owners. It can assign responsibility for family education, engagement, employment policies, philanthropy, and nominations to company or office boards. PwC identifies the family or owner council, family education, family employment policy, family management, and conflict management as core family governance elements. PwC
It is critical that a single family office builds its board of advisors based on the family’s investment goals and areas of activity.
3. Family office and board charters
A family office charter should distinguish ownership decisions from management responsibilities. It should give office leaders clear authority for administration, reporting, risk controls, and execution, while reserving major strategy and policy decisions for the family's governing body. A board or advisory board charter should cover qualifications, independence, duties, information rights, conflicts, confidentiality, committees, and evaluation. Deloitte describes family-set vision and strategy, with tactical execution delegated to capable personnel and supported by outside advisers. Deloitte
4. Committee charters and advisor boundaries
Use separate charters when an investment, audit, risk, compensation, or philanthropy committee has meaningful authority. State whether outside advisors vote, advise, or observe. Record who appoints them, required expertise, conflict disclosure procedures, and reporting lines. The SEC states that a family office may include non-family directors when the applicable control requirements are satisfied. SEC