umbra.

The Method

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THE METHOD 01

What is family governance?

A family is a small society. How it communicates, decides, and stays itself across time is its governance.

After Tagiuri & Davis, Three-Circle Model, Harvard, 1978; James E. Hughes Jr., Family Wealth: Keeping It in the Family, 1997.

The long flourishing of a family does not rest on its money. It rests on the human and intellectual capital of its members, and on the governance by which a family chooses to grow them,

Family governance is the set of agreements, structures, and habits a family uses to make decisions together, hold what it shares, and pass forward what matters across generations.

DEFINITION

Governance has a reputation for being heavy: thick constitutions, formal councils, legal documents. It does not have to be. The families that succeed at this build something quieter. A handful of clear practices, repeated over time. Tools, not rules. A discipline a family can carry.

THE UMBRA VIEW

Antiquity
Patria, dharma, lineage
Roman patria potestas, Hindu Arthashastra trusteeship, Confucian lineage codes. Early family constitutions in everything but name.
15th c.
Medici Florence
Banking dynasty governing through alliances, marriages, and an inner council. Wealth and family fused into civic power.
17th to 19th c.
European houses
Family pacts, primogeniture, and trading-house charters. The Rothschilds, Wendels, and others formalise succession in writing.
1955
Mulliez Association
France: eleven siblings sign the first modern "family agreement" of its kind. Collective ownership, shared rules, training for the next generation.
1978
Three-Circle Model
Tagiuri & Davis, at Harvard, map family, ownership, and business as overlapping systems. The field's cornerstone framework.
Today
A learnable practice
Governance moves earlier and lighter. Taught at the dinner table and in the classroom, designed to fit a family's life rather than the other way around.

Long before the word existed, families everywhere built rules to hold themselves together. The modern field is roughly fifty years old.

An ancient practice.

A short history

Carvajal · Colombia
Success
Manuel Carvajal Valencia founded the company in Cali in 1904 with a printing press imported from Europe. The Carvajal group today spans paper, packaging, technology, and real estate. The family is in its sixth generation, with roughly 280 members, and governs the business through a shareholders' assembly, a family council, and a written constitution. In 1960 Manuel's son persuaded the cousins to transfer the first 40% of the company to a family foundation. The foundation today holds 23.5%, meaning that portion of the business cannot be sold by any individual descendant. The family received the IMD Global Family Business Award in 2022.
Frame
Foundation-owned enterprise
Core value
Continuity through stewardship
Culture
Catholic, Andean, civic
Lee Kum Kee · Hong Kong
Success
In 1888, in southern China, Lee Kum Sheung accidentally caramelized a pot of oyster broth and turned the result into a sauce. The company has been run by Lees for five generations. After the 1997 Asian financial crisis brought the patriarch's youngest son close to leaving, the family commissioned a written constitution, adopted in 2002. It governs nearly every family-business overlap: spouses are barred from working in the company, members retire at 65 from operations and at 70 from the Family Council, and younger heirs must work outside the business before they can return to it. Its principle, Si Li Ji Ren, translates roughly as "consider others' interests before one's own."
Frame
Constitution after crisis
Core value
Si Li Ji Ren
Culture
Cantonese, intergenerational, written
House of Liechtenstein
Success
The House of Liechtenstein traces its origin to 1136, when Hugo von Liechtenstein built the family's first castle in Lower Austria. The principality of Liechtenstein, established in 1719, is named for the family. Written family law began with the 1606 Family Covenant signed by Prince Karl I and his brothers, which set aside part of the family estate as inalienable property of the dynasty. Prince Hans-Adam II revised the Hausgesetz in 1993 and in 2004 transferred day-to-day political authority to his son Alois as regent. The family also owns LGT Group, today the largest royal-family-owned private bank in the world, which manages more than $650 billion in assets across Europe, the Middle East, and Asia.
Frame
Sovereign continuity
Core value
Inalienable, indivisible
Culture
Catholic, princely, 900-year lineage
Pritzker · United States
Failure
The Pritzker family built one of the largest private fortunes in the United States: Hyatt Hotels, the Marmon Group of around sixty industrial companies, and a network of approximately 2,500 trusts that held the empire together across generations. In 2002, nineteen-year-old Liesel Pritzker, an actress and Columbia student, sued her father Robert and eleven older cousins for $6 billion, alleging that assets in trusts established for her and her brother had been moved out years earlier without their knowledge. The case settled in 2005. Liesel and her brother Matthew each received roughly $500 million. The settlement also triggered a separate agreement among the older cousins to formally divide the Pritzker holdings into eleven independent branches.
Frame
Structure without legitimacy
What broke
Heirs without voice
Lesson
Paperwork is not participation
Gucci · Italy
Failure
Guccio Gucci founded the company in Florence in 1921 as a leather-goods workshop. After his death his sons Aldo and Rodolfo expanded the business internationally; by the 1980s the next generation was openly fighting over shares, board seats, and creative control. In 1986 Aldo Gucci was sentenced to a year in U.S. prison for tax evasion, after his son Paolo turned over evidence to the IRS. Maurizio Gucci, Rodolfo's son, consolidated control of the company by buying out his cousins, borrowing heavily to do so. In 1993, deeply in debt, he sold the family's remaining 50% stake to the Bahrain-based investment firm Investcorp. Two years later his ex-wife Patrizia Reggiani arranged his murder.
Frame
No frame, only ownership
What broke
Conflict had no container
Lesson
A name is not a structure

Some families have done it.

Five families, five frames