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Introduction and case studies

Three Case Studies – how some families’ wealth disintegrated, while others remained intact into the 4th generation.

Strategies for allocating privileges, position, and power

“3 Quantitative + 1 Qualitative” mechanism for achieving successful succession planning:

• The 3 quantitative mechanisms

1. Generational Wealth Strategy
2. Wealth Holding Structures
3. Family Governance

• The qualitative mechanism: overview of 18 guiding principles that all family office advisors should have in mind.

Member class structures

Understanding the various family member classes and their significance:

▪ Member class & class member – understand the difference.

▪ Privileges, Incentives and Rights – understand the difference.

Applying the GWS formula for your client’s demographic profile.

• The planning structure forgotten by most founders.
• 4 core GWS options for different family values & demographics, and why. Understanding the advantages & pitfalls of each option.
• How the GWS design in the family constitution balances between certainty and flexibility.

Consequences of not planning

3 major pitfalls for the family in the long run.

Family & working dividend

Building stewardship:

• How to balance family dividends and working dividends between family members’ needs and incentives.
• Understanding the 3 fair and equitable formulas for calculating working dividends and family dividends, and why.

Bottom-up double portion calculation method

Seniority-based and member-class strategies – understand their significance.

Family Council

Professionalising family relations and setting up roles of the family council.

Family Constitution

• Discover the 12 inherent clauses in the family constitution in most Asian families.
• Designing the global vs local constitution for siblings-owned family business.

Family Committees

The 4 major committees in the Family Council:

• Family Business Committee
• Family Employee Committee
• Family Office Investment Committee
• Family Relations Committee

The family governance process

Five steps for operating one’s own family council meetings.

Centralisation of family wealth

• 3 major reasons why a family needs to centralise the family wealth.
• Understand the best practices.

Wealth preservation vehicles

• Comparing the 4 types of preservation vehicles.
• 4 core options of wealth holding structures, and how to customise them for various family wealth profiles.
• Combining a family’s wealth-holding structure with its generational wealth strategy for effective generational wealth transfer.

Resolving family conflicts

Understanding the 4 major conflicts and how to resolve them:

• Values Conflict
• Interest Conflict
• Relationship Conflict
• Structural Conflict

Reviving family unity

• How the risk of conflict increases with each passing generation.
• Five checklists for reviving family unity.
• Performance appraisals for family members.
• Key provisions in the shareholders agreement.
• Conflict resolution mechanism.

Undesirable stereotypes

Understanding the 3 concepts of:

1. “Communism” behavior
2. “Deprivation” behavior
3. “Trust Fund Baby” behavior

• Key considerations for each of the above 3 situations when structuring family wealth preservation strategies.
• Discover distribution guidelines that prevent cultural flaws from eroding family values and wealth when transiting to next generation.

Counseling for change

Five steps to counseling for change:

• Defining the problem objectively.
• Communicating what alternatives are acceptable to the family council.
• Creating an incentive system to encourage desired outcomes.
• Breaking undesirable patterns.
• Showing empathy.

Grooming the succeeding generation

Starting early, understanding:

• 6 phases of grooming the succeeding generation.
• 7 milestones for business succession.

Agency conflict vs outsourced chief investment officer

Understanding 6 major factors causing agency conflicts in the management of family wealth.

Family Office Investment Committee

Discovering and customising the roles and functions of the Investment Committee.

Investment Policy Statement

Understanding the 5 key elements in the Family Investment Policy Statement.

Dynamics between majority and minority shareholders

• Is it always “all’s well, ends well” when it comes to the succession?
• Understanding the inclinations and conflicts among majority & minority shareholders.
• Discover the best practices in managing the dynamics between majority & minority shareholders.

Consequences of not having a shareholder succession plan

Strategies for the 3 stages of the business during the founding partner’s life cycle.

From "Shareholders agreement" to "Shareholders succession agreement"

• Functions, timeframe, and factors when determining shareholder exit.
• “Years” vs “Age” approach when dealing with age gap of shareholders.

Planning a shareholder exit

Discover the 3 P’s options for shareholders’ exit.

Business continuation trust

5 tools to ensure the business will go on harmoniously and resourcefully.

Share class rights

Using different share classes to align key employees to the family’s interest.

Using share awards for succession planning

• Customising it the right way.
• The share vesting conditions.
• The 5 to 7-year leadership transition plan.