Some reflections on family offices and governance

How can families sustain alignment, purpose, and performance across generations?

Josh Baron (Harvard Business School) began this session by reframing the idea of a family office. Rather than a narrow investment vehicle, he described family enterprises as evolving systems—spanning operating companies, investments, and foundations. The key challenge is not simply managing wealth, but organizing ownership, governance, and purpose as families grow and diversify.

A central theme of the session was the role of purpose. Professor Baron argued that purpose is not a soft concept, but a strategic asset. Purpose operates through three key channels: it shapes continuity choices (the “power to sustain”), enables competitive advantage (the “power to win”), and helps mitigate conflict (the “power to destroy”). It aligns family members around shared goals, sets boundaries for decision-making, and provides a framework for balancing growth, liquidity, and control. Without it, even well-structured governance systems can struggle. 

The discussion gained additional depth through the perspective of Fabian and Tor Bonnier, representing the sixth and seventh generations of a 200-year-old family business. Their story illustrated how purpose evolves over time. Originally rooted in publishing and cultural development, the Bonnier family today emphasizes both financial discipline and a broader mission: safeguarding freedom of expression and building “cultural capital” alongside financial returns.

One of the most striking insights was how purpose is actively maintained—not assumed. As families expand, informal traditions give way to formal governance: shareholder agreements, family councils, and clearly articulated owner directives. The Bonnier example shows how purpose is embedded not only in values, but in structures, processes, and regular communication. Their governance model separates family and corporate systems while ensuring transparency and alignment between them.

Another key takeaway was the importance of engagement. Strong governance is not just about rules—it is about participation. When family members choose to be involved, attend meetings, and contribute to discussions, it signals a healthy system. Conversely, disengagement can be an early warning sign of deeper issues.

Finally, the session addressed a less comfortable reality: purpose naturally declines over generations if left unattended. As emotional ties to the founding business weaken, families must actively reinvest in shared identity and long-term vision. This requires deliberate effort—through education, communication, and opportunities for involvement across generations.

In sum, governance structures provide discipline, but it is purpose—clearly defined and collectively embraced—that drives alignment and long-term continuity.

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Anete Pajuste is Professor of Finance and Head of Accounting and Finance Department at the Stockholm School of Economics (Riga), and an ECGI Research Member.

This blog is based on a discussion held at the 2026 IESE-ECGI Corporate Governance Conference Family Firms: Purpose, Economic Performance and Social Impact. Visit the event page to explore more conference-related blogs.

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