The governance arrangements that work well in a first generation are seldom the ones that work in a third. Numbers, geography, and divergence of interest all rise faster than most charters anticipate.
From one voice to many
A first-generation owner can govern by intuition. By the third generation, the ownership group is often a dozen or more people across several countries with materially different lives and time horizons. Governance must move from intuition to articulated process, or it stops working.
The difference between a board and a council
Boards govern the enterprise. Family or owner councils govern the relationship between the owners and the enterprise. The two are often conflated, and when they are, neither does its job well: the board ends up arbitrating family matters and the council ends up second-guessing operating decisions.
Charters as living documents
A governance charter that has not been revisited in a decade is no longer a description of how the group governs itself; it is a historical artifact. Routine review — not in response to crisis — is what keeps governance current.