Family and Family Business Risk Management

Family businesses have always thought about multiple aspects of risk. How successful are our investments and operating businesses? What are our plans for succession? Are our family members happy and safe? How do we address emerging issues such as COVID-19 and cyber?

This ‘issue-focused’ approach to risk has worked well for many business owning families for many generations. It has enabled them to thrive while addressing day-to-day issues affecting family members and business performance.
However, it no longer reflects the complexity of the world in which family businesses operate and the need for family leaders to navigate ever-increasing geopolitical, economic, climate, technological and social volatility. It does not reflect the growing scale and complexity of many family businesses and wealth owners and their investment and business portfolios. It does not reflect generational shifts in priorities and purpose among family members. It also does not reflect increasing transparency and societal expectations of businesses and their decisions, performance, impact and conduct. This ever-growing scrutiny applies whether businesses are publicly or privately owned and can be challenging for families who value their privacy and reputation.

Our work on risk aims to enable families and their businesses to take an integrated approach to impact, innovation and risk and build the capabilities they need to remain resilient and thrive in a complex, volatile world. It focuses on three interlinked areas. We help our clients review and strengthen their risk governance, processes, capabilities and culture, at the level of families, family offices and their portfolio companies. We help them assess their enterprise-wide risks and identify targeted actions to address priority, new and emerging risks. We also provide counsel on how best to manage specific risks faced by family businesses.

Our work enables clients to take a holistic, systematic approach to identifying and managing the risks they face. We do this by bringing the best of our expertise to bear to serve a client, across areas of risk including: strategic risks (including geopolitical risk, the family dynamics and cohesion, and societal expectations); risks to business performance (including the performance of operating businesses); people risks (including capabilities, safety and wellbeing, and conduct); operational, technological and third-party risks (working alongside firms specialising in IT, cyber and data risk); reputational risk (including online reputation management and digital privacy); and legal and regulatory risk (working alongside our clients’ legal advisors).