Governance can be intimidating to business families and legacy wealth families who may not have operating businesses any longer but share and manage complex assets. This is especially true if they have not educated themselves about good governance and committed themselves to it. Governance is crucial for achieving both long term business/financial success and family harmony.

Simply put, governance is coming together and getting clear about how decisions will be made, who will be involved with making decisions and in the business of the family generally, how information will be shared and overall setting and managing of expectations. I’m referring specifically to governance that relates to the interplay of family and shared assets rather than of a business alone.

In my view, parenting – and in particular parenting that takes into account the context of a family’s business and financial success – is the earliest and most powerful foundation of good governance. When it is missing, the consequences are glaring.

Recently I worked with an immigrant who came to the U.S. as a young child, experienced harsh poverty and worked incredibly hard to create a business empire. He wanted to make life easier for his son and daughter: he asked very little of them, bought them everything they wanted and more, took them into the business and paid them much more than market value, (they never would have earned positions like these on their own) and he did little to train them. His heart was in the right place, but he developed entitled children with minimal skills. He did much the same with his grandkids by buying them expensive cars as soon as they got their licenses and put them all through private K-12 and college and gave them no-show jobs with his companies. His children were making bad deals and losing the company millions, and the grandkids were floundering, unemployed and living off their no-show job income.

The founder was in tears. I helped him to see that while he acted out of love, he had made life too easy for the rising generations. HE had a hunger based in surviving while they had wanted for nothing and little was expected of them.

Some may see it as a leap to connect parenting a young child to family governance.  But in my experience, I frequently see tough situations in the world of enterprising families that could have been avoided with more enlightened and thoughtful parenting beginning at the earliest years.

It is necessary that any child, regardless of family wealth or poverty, be held to high expectations, to work for what they get, to contribute to the family/household for no money (at least some of the time), to endure and grow from frustration and failure, to earn money and pay for a least some of the things they want.

I also see wonderful, close families who pull together, pitch in, and work very hard. They earn their way, respect all the employees who helped the family create their success and give back to their communities and the world with a sense of gratitude and humility. In these families, parents were thoughtful about most or all of the essential developmental tasks I describe above from the earliest years of childhood.

The distinction between the child of wealth and those of modest means or even poverty is that the former context has the potential to take the struggle, frustration and hardship out of life. And these are exactly the things necessary to get “governance” on the right track.