Series of thought leadership papers launched by Deloitte and UBS 

Summary:

Long-term implications of global disruptions continue to evolve and impact policymakers, businesses and families around the world. In times of ambivalence, many families and their businesses are prioritizing family governance to effectively manage these uncertainties for a shared future, and capture opportunities amidst a rapidly changing macro-economic environment.  Every enterprising family is unique with a different trajectory of history and future aspirations. Therefore, it is paramount to establish a customized governance system that not only fits families’ needs and purposes, but also embraces changes and allows resilience for unpredictable futures.

Deloitte collaborates with UBS to launch this paper Creating a shared future for generation- cultivating responsible stewards with family governance. In this paper, we explore how business families in the Asian Pacific region consider their particular circumstances when developing family governance systems, the unprecedented challenges they encounter in recent global disruptions and the strategies they take for longevity. This paper is a part of the family office report series launched by Deloitte and UBS, which explores the trends and outlook of family offices, with topics ranging from family succession, family governance, succession planning to sustainable investing. 

We have summarized a few key takeaways from the white paper for your reference and considerations. For more information, please refer to the white paper.

Key Takeaways:

1. Building family governance systems is a journey of self-discovery. A customized governance system should take account of families' individual contexts and evolve based on reassessment of the family's future and rediscovery of shared purpose
   Many wealthy families in the Asia Pacific region have acknowledged the role of effective family governance systems in preserving family values and unity. Despite naturally built-in governance arrangements, such as family gatherings, other families have established formal communication platforms and adopted various governance tools to strengthen family cohesion, mitigate potential conflicts and accelerate collective decision making in order to be proactive to various internal and external changes.
2. Family governance systems provides diverse options for next generations to participate as stewards for families' assets, regardless of whether they choose to join family business, or pursue their own aspirations
   By providing the next generation diverse options to participate, whether through working in the business, or managing family affairs or wealth, family governance systems essentially create a variety of touch pointswhere family members can get involved. Junior boards and next generation committees or sub-committees have been gathering popularity as the stepping-stones for the rising generation to develop. These tailored spaces providing younger generations with opportunities to take ownership and test out their ideas.
3. While business families in various stages of succession cycle have different focuses in designing governance system, they all face the common challenge of engaging and developing next generation in the long run
   For multi-generational families in Singapore and Hong Kong, they generally have a higher level of awareness to plan for sustainable family legacy. Their peers in Mainland China are in relatively early stages of succession cycle and a governance system is generally not in place. The challenge of cultivating next generation is exacerbated by intergenerational tensions and the general lukewarm interests among the next generation to take over the reins. Enterprising families in China are considering the option of grooming next generation as responsible shareholder and steward, rather than following the Asian tradition of having them carry the torch.
4. Involving next generation in overseeing family investments bestows trust and tolerance and motivates responsible stewardship in the rising generation
   Enterprising families across Asian Pacific region are seeing more next generations participate in family investments. Setting up a family office to oversee family investments is often an important step for families to establish a governance system, while helping to forge new development paths for next generation themselves. Participating in investment decision making for the family bestows trust and responsibilities, while motivating them to work towards stewardship.