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| Building Your Family's 100 Year Plan: The Series |
100 Year Plan Introduction: Making Meaning of Wealth Across Generations
Brett Anderson
12/01/2003
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"Traditions of entrepreneurship in a family help to promote leadership—the ability to make difficult decisions," says Braden. "This [leadership] takes many different forms, especially in large families." She adds that the governance structures of the family must incorporate rules for choosing these leaders and delineating their responsibilities. "There has to be accountability."
Family members decide together who will be involved in operating businesses—and how. And sometimes, effective leadership must elect to remove the family from them altogether. One of the historic moments in the history of American industry occurred in 1972, when Irénée du Pont signed a document that separated his extended family from the corporation that bears its name. Fewer than 200 years after E.I. du Pont founded the firm, the sprawling clan had parted ways with it: Only three family members still serve on its board, and Irénée was the last member to make senior vice president. Some suggested that he might assume leadership of the firm, but he demurred: "I as a stockholder would have objected to me as president," he said some years later. And so the decision was made to fold the family’s 28 percent controlling stock—worth billions—back into the corporation, a move that underscores an important precept of the multigenerational plan: independence.
"In the context of a successful, long-term plan for a family and its wealth, you have to provide independence to family members," explains Braden. "Those exit options have to be built in, so that family members don’t feel trapped by having their assets connected to the family."
The First of Four Parts
The complexities inherent in all of the ideas presented here bear deeper exploration. Like a well-conceived 100-year plan itself, our understanding of the dynamics within our families, the rules required to guide our group decision making, the institutional options available to us, the knowledge and spiritual strength to be gained through responsible giving, and the relationship of families to their business is an ongoing process.
Over the course of the next three issues of Robb Report Worth, we will consider these subjects, sharing often contradictory ideas and experiences of professionals as well as those among us who have learned through trial and error. Beginning with a discussion of the family mission statement in this month's issue (December 2003), we will focus on the relationships through which the wealth of our generation’s hearts and minds can be carried forward.
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