Family Governance: Making sure the unity of Family remains

Evanna Phoon wrote the below article and she is a Senior Franchisee of Rockwills. She can be contacted at

Family Governance: Making sure the unity of Family remains the largest asset that keeps the Family Business Together?

In corporate, everyone heard of corporate governance. When it comes to family, there’s also a term that governs the family, which most people seldom heard of, in here, we called it family governance.

 If you google “Family Governance”, there are many explaination. Some say that it is a multi-generational management technique designed to ensure that your family’s history, values and wealth extends well beyond the multi generations. Some will say Family Governance is a “social contract” among family members who acknowledge specific shared family goals and values by which each voluntarily agrees to abide.

When I meet clients, I like to tell them that they can form their family governance by start to list down what can be done and what cannot be done by the family. Short, simple and sweet explanation in plain english.

Back to Lee Kum Kee example where researchers always use when they want to highlight successful trans-generational family business. In their family governance, it states, twice a year, the whole family will meet up. Once a year, everybody from the grandfather, uncle, auntie, cousin, nieces etc will go for family retreat, or some call it “DNA networking”. Lee Kum Kee family is in transition to the 6th generation and the one running the business now is the 5th generation. This is stated in the family governance and everyone must go to the DNA networking retreat without fail, even down to the little toddler.

Another interesting part says, the spouses of the son, grandson, means the wives of the male in Lee family cannot join the family business. As oppose to the spouse of the daughter or granddaughter, the husbands of the female side can join the family business. This is listed down in their family governance and there are reasons for them to obey this but there must be something that they are doing right here because they are in their 6th generation now.

Other clients that we talk to say that they want to state in the family governance that all family member must have a religion, no matter it is Buddhist, Christian, Muslim, as long as the family member must have a religion because the founder believe that religious worship is important for nourishing one’s virtue, keeping faith that will help enrich one’s wisdom.

In the last issue, I mentioned about a family owned business run by two fully Chinese educated brothers, they are building a global business with long serving loyal employees. Both of them always jokingly tell people that they don’t understand any other English characters except for their own name, the word “RM” and “USD”.

What those two brothers strongly believe in is that Human resources are the most precious asset of the company. They wanted to ensure that every employee of the company should be equally treated without any personal prejudice. The employee should be respected and appointed to positions which commensurate with his capability and achievements. And they believe continuous learning is the key to remain competitive in the challenging world. They emphasize in their family governance that human resource and employee benefit should be a priority.

Beside that they also believe that education for the next generation is important. They want their children and descendant to take up courses that enhance them spiritually, morality, increasing their wisdom and also encourage moderate physical exercise. They went on to setup two education trusts, one is to benefit their employee’s children. The employee’s children can apply for scholarship from the employee welfare education trust. While their own descendant will apply from family education trust if they wish to further their tertiary education.

Some families specifically put that gambling is not to be encouraged and will go to the extent of suspending the regular monetary rewards to the beneficiary if they are caught gambling for more than a certain amount. They also pen down in their family governance that while the world is challenging and competition is unavoidable, some extreme and immoral measures to beat their competition are to be avoided.

Rockwills Case Study Lee Kum Kee

Lee Kum Kee


Picture #1: Lee Kum Kee: A Successful Family Enterprise Whose Wealth Lasts over Five Generations. They are often the case studies used by researchers when they are studying successful trans-generational family businesses.

This process is quite interesting and In the next issue, I’ll give more ideas and example to put in if you are planning to list down your own family governance … Stay Tuned.

MalaysiaWills CEO, Evanna Phoon.

About the Author

Evanna Phoon is CEO & Founder of, Malaysia’s first online will writing service provider for Rockwills Corporation Sdn Bhd & as-Salihin Trustee Bhd. Visit her website to download FREEebooks & watch over 300+ videos on the topic of Will Writing for Personal & Business. She can be contacted via

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Saturday, October 20th, 2012 article

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