Sustainable asset management for UHNWIs

Proper corporate and family governance is essential for (ultra) high net worth individuals (UHNWIs) who want to ensure the continuity and preservation of their assets. It provides a structure for decision-making and ensures that business and personal interests are aligned. HVK Stevens assists entrepreneurs, families and its members in setting up and maintaining a clear governance structure tailored to their values, ambitions, and assets. This creates a solid ground for preserving, expanding, and efficiently transferring assets.

What is corporate and family governance?

Corporate and family governance encompasses all the arrangements that determine the relationships between family members and the ownership and management of family and business assets. These arrangements are aimed at protecting the business and family capital, optimizing business succession, and ensuring a smooth transfer of assets to the next generation. By thinking through and recording agreements on strategy, policy, and succession in a structured manner, both the family business and private assets are managed in an effective manner.

Why family governance for UHNWIs?

For entrepreneurs and families with significant assets, good corporate and family governance is essential to ensure the continuity of their wealth. Without a clear structure, family relationships and the continuity of the business can be jeopardized, especially when multiple generations are involved. Well-structured discussions and clear arrangements help to prevent conflicts by formulating clear guidelines on the involvement of family members, the succession of assets, and the long-term strategy of the family business. It offers the opportunity to bring together all family members with different interests and backgrounds and ensures that everyone is working toward the same goal.

Benefits of good corporate and family governance for UHNWI

• Sustainable asset management: assets are managed in a structured manner so that they are transferred to the next generation(s) in the best possible way, considering the interests of each generation. In this context, one could consider, for example, managing assets from the family's perspective rather than from the perspective of the person for whom they are held economically.
• Succession planning: a clear plan for the succession of both the family business and private assets, ensuring a smooth transition.
• Protection of family values: family governance helps to preserve the family's shared mission, vision and values.
• Minimizing conflicts: clear agreements can prevent ambiguities and conflicts.
• Tax optimization: well-thought-out structures help prevent tax risks and ensure that the right percentage of tax is paid under the applicable laws and regulations.

What can be controlled within family governance?

The family must make clear agreements on the following topics, among others:

• Mission and vision: what is the strategic direction for the family assets? Is the goal to preserve the family assets, the family enterprise or to invest in specific sectors
• Family member involvement: which family members will be actively involved in the family business? What are the requirements for successors?
• Asset management: how will the assets be managed? Which investment strategies and tax structures should be followed?
• Philanthropy: what is the role of philanthropy within the family? Should a specific philanthropy plan be set up?

How do you implement family governance?

Effective implementation starts with identifying and determining the wishes of all those involved. This is often laid down in the articles of association of a family foundation and, the stakeholders or shareholders agreement, in the case of more complex wishes, in a family charter, which sets out the family's mission, values, and vision. This document serves as the basis for all strategic decisions, both within the family business and in wealth planning. In addition, legal documents, such as shareholder agreements and board regulations, can be amended to further strengthen the governance structure.

Professional guidance for family governance

Implementing family governance requires specialized knowledge of legal, tax, and family structures. It is essential that these governance structures are carefully designed and implemented to protect the family's assets in the long term over generations. Our multidisciplinary teams guide you every step of the way, from drawing up wills and prenuptial agreements to designing succession plans for the family business. Drafting a family chart and shareholders or stakeholders agreement, always with an eye for consistency, discretion, and continuity.

You can read more about our approach to family businesses on the page about Family Owned Business.