Preserving family wealth is relational rather than financial
Many wealthy families are transgenerationally oriented. Maarten de Groot - scientific director of the VU Center for Enterprise Family Research - investigated how these families can preserve their wealth for several generations - not by analyzing the family business, but by analyzing the family itself. He was in contact with more than a thousand wealthy families worldwide. De Groot concludes that maintaining prosperity is enhanced by effective governance and strong social capital, and that wealth preservation is therefore not about money.
03/23/2021 | 3:20 PM
Wealthy families have a great impact on our society. They contribute significantly to global economic growth, employment, philanthropic capital, seed funding, technological innovation and even capital market performance. In addition, families with a transgenerational orientation are likely to contribute even more to society and the economy. Given the public debate and the importance of such families to the economy, it is strange that in the field of family business research, where the family is the critical variable that theoretically distinguishes family businesses from other businesses, the literature has so far neglected the family itself.
Wealthy families are heavily criticized and are often at the center of discussion. Public opinion has become strongly polarized in recent years. De Groot's research found that wealthy families derive most of their wealth from active ownership of family businesses and differ from the stereotype rich and famous.
While some multi-generational families have been successful in wealth preservation, most others have been much less successful. The findings from De Groot's research are based on interviews, surveys, observations and contextual data from corporate families, many of which are over 100 years old - families with more than 300 members and assets worth billions of dollars. The oldest family business dates back to the early 18th century and the largest comprises twelve family branches and has more than 1,000 members.
You can read the interview in de Volkskrant here.