Why Families Need a Governance Plan Before They Need It

The Umbrella Before the Rain: Why Governance Can’t Wait

In many African cultures, elders say, "Repair the roof while the sun still shines." It’s a simple truth—preparation prevents disaster. Yet, when it comes to family wealth, too many wait until conflict erupts or finances crumble before seeking structure. Like an umbrella uselessly bought mid-storm, governance plans created in crisis often fail.

The most resilient families—those who sustain wealth across generations—don’t wait for lightning to strike. They build their "umbrella" of governance long before the clouds gather.

Governance: The Invisible Scaffolding of Family Wealth

In Raising the Baobab, we compare family governance to the hidden roots of the baobab tree. What’s visible—the trunk, the branches, the fruit—relies entirely on what lies beneath. Similarly, a family’s Financial Capital is only as strong as its foundation:

1. Human Capital (Values & Education): Who are we? Without shared values, families fracture. A governance plan aligns expectations—whether defining roles for next-gen leaders or setting education milestones.

2. Intellectual Capital (Wisdom & Strategy): What do we know? Documented policies (e.g., succession criteria, conflict resolution) turn generational wisdom into actionable systems.

3. Social Capital (Trust & Relationships): How do we connect? Clear communication frameworks prevent misunderstandings. Example: The Ubuntu principle—"I am because we are"—reminds us that collective well-being outweighs individual gain.

4. Spiritual Capital (Purpose & Legacy): Why does our wealth exist? Governance articulates the family’s mission beyond money, ensuring wealth serves a meaningful vision.

Only then does Financial Capital thrive—not as an isolated goal, but as the natural outcome of intentional stewardship.

The Cost of "We’ll Cross That Bridge Later"

Consider the Adansi family (name changed), whose thriving mining business collapsed after the founder’s sudden passing. With no will, no succession plan, and no forum to mediate disputes, siblings battled in court for a decade—eroding assets, relationships, and their father’s legacy.

Reactive governance is crisis management. Proactive governance is legacy preservation.

3 Steps to Start Before the Storm

1. Draft a Family Charter: Even a one-page agreement outlining values, decision-making processes, and conflict-resolution mechanisms can prevent chaos. (Tip: Use the free template in Raising the Baobab to begin.)

2. Host an Annual Family Assembly: Like the Ashanti Abanhyia (family council), create a space for open dialogue. Discuss finances, educate the next generation, and revisit goals.

3. Define "What If" Scenarios: What happens if a leader dies? If siblings disagree? If the business underperforms? Documenting answers removes emotion from future decisions.

   
   

The Baobab Doesn’t Grow Overnight

A governance plan isn’t about distrust—it’s about love. It’s the work of tending the roots so the tree shelters generations to come. As the Swahili proverb goes, "When the drumbeat changes, the dance must adapt." Families evolve; governance ensures they don’t unravel.

Your Next Step: Learn how to plant the seeds of resilience in Raising the Baobab—get your copy here.

Tsitsi Mutendi is a trusted strategic governance risk advisor specialising in family businesses and family offices. Through her platform, Nhaka Legacy (http://www.nhakalegacy.com), she empowers families to implement effective governance practices. Tsitsi is also involved with African Family Firms (http://www.africanfamilyfirms.org) and shares insights on sustainability and transgenerational wealth in her podcast, Enterprising Families (https://anchor.fm/enterprisingfamilies). Her work focuses on fostering resilient family legacies and promoting sustainable practices within family enterprises.