Family Constitution
A family constitution is a structured governance framework defining roles, decision rights, and processes for family wealth and long-term management.
Allocator relevance: Improves predictability of decision chains and reduces governance risk that can disrupt mandates or timelines.
Expanded Definition
Unlike a charter (values-first), a constitution is more procedural: how decisions are made, who decides what, how leadership transitions occur, how conflicts are resolved, and how the family interacts with the family office. It may include committee structures, voting rules, and criteria for participation.
For allocator intelligence, a constitution helps explain why certain decisions take longer, who holds veto power, and how changes in leadership affect mandate continuity.
How It Works in Practice
Families draft constitutions to institutionalize decision-making across generations. It may be paired with training for next-gen members and aligned to legal structures (trusts, holding companies) without being a legal document itself.
Decision Authority and Governance
A constitution often defines the family council’s role, relationship to the investment committee, and delegation boundaries to CIO/CFO/Executive Director. It can reduce ambiguity around “who approves” and “who influences.”
Common Misconceptions
- A constitution is always legally binding.
- It guarantees fast decisions.
- It eliminates family dynamics.
Key Takeaways
- Defines process and authority structure for wealth decisions.
- Useful for mapping decision chains and governance stability.
- Supports continuity during leadership transitions.