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Family wealth has been crucial to the business and development of many societies globally. In many developed climes, the economies were and are still controlled by family dynasties. For example, in the United States, families such as Rockefeller, Walt Disney, and Bill Gates, to name a few, can be said to be major drivers of the economy. In Nigeria, likewise, prominent wealthy families such as the Otedolas, Otudekos, Elumelus, Okoyas, Adenugas, and the Dangotes to name a few, arguably wield similar economic powers.
There is no gainsaying that sustaining family wealth is just as important as creating it. In a study of about 3200 families, conducted by the Williams Group, it was found that seven in ten families tend to lose their fortune by the second generation, while nine in ten lose it by the third generation. [1]Thus, there is a high propensity for families to lose wealth by the third generation. This is largely because a proper family governance structure is absent. All this can however be better controlled if there is a proper family governance structure in place. As the family grows, the very nature of the family tends to become complex and thus there is a need to put proper structure in place for governance.
[1] SMU Lee Kong Chian ‘How to beat Third-generation Curse’ ≤https://business.smu.edu.sg/master-wealth-management/lkcsb-community/how-beat-third-generation-curse> accessed 12 November 2023.
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