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Estate plans, shareholder agreements, and tax structures tend to dominate conversations about family wealth, yet a new Veritage International study suggests that another element may quietly decide whether those plans work. The firm’s The Missing Link in Family Business Transitions: How Emotional Disconnection Threatens Family Legacy report presents emotional governance as a missing link in long‑term wealth planning for wealthy business families.
When Planning Ignores Feelings
The study is based on qualitative interviews with 35 founders or current owners and 42 next‑generation members across North America, Europe, Australia and Oceania, Latin America, Asia, and the Middle East. Participants came from families that own operating companies or family offices and expect to transfer significant ownership or wealth in the coming years.
Researchers asked what it means to be “adequately equipped” to take over ownership or inherit wealth. Founders and current owners emphasized education, work experience, financial literacy, and governance knowledge, while next generation interviewees focused more on emotional readiness, sense of identity, and confidence that they can speak honestly in family settings. The report argues that this disconnect in definitions leaves an emotional gap at the center of many wealth plans, even when documents appear orderly.
Emotional Governance and Silent Risk
Emotional governance describes how feelings and behavior are managed so they become an asset, rather than a liability, to the family system and its enterprise. Founders and current owners most often named entitlement and rivalry as key emotional challenges, often linked to younger family members. Next‑generation participants pointed to weak communication and a sense that the current owning generation holds tight control, suggesting each group sees the primary emotional risk in the other, which can make shared planning more fragile.
Survey data in the report shows that about one in three next‑generation respondents do not feel emotionally safe to share their challenges with their family. The study further reports that 37 percent of founders and 55 percent of next‑generation members have experienced a mental health–related issue at some point, alongside strong pressure to perform that many describe as self‑imposed. According to Veritage, those patterns indicate that emotional governance is not an abstract concept but a practical risk area that can influence whether family members stay engaged or withdraw from ownership and leadership roles.
Governance Documents and Human Capital
Formal governance emerged as another area where emotional governance appears to be missing. Around 55 percent of founders and 41 percent of next‑generation participants said their families have governance documents dealing with succession and wealth transfer, yet 64 percent of founders and 76 percent of younger members reported that those documents do not address emotional issues or family dynamics. Only a small minority of respondents said their families work with external advisors on emotional family dynamics, despite widespread recognition of communication challenges.
The report closes with practical next steps rather than prescriptive rules. Suggested entry points include noticing recurring tension in meetings, naming emotional safety as a shared goal, and setting clear agreements on how to discuss topics such as roles, expectations, and questions of fairness. Veritage observes that many wealthy business families invest considerable effort in protecting financial capital, and proposes that giving similar attention to emotional governance may help them protect the human capital on which those plans ultimately depend.
The Missing Link in Family Business Transitions: How Emotional Disconnection Threatens Family Legacy report can be downloaded here
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