Decision Rights in the Family Office: Who Decides What?

Investment decisions, operational decisions, and governance decisions run on different clocks and require different competencies. Investment decisions are time-sensitive and benefit from delegated authority within a policy; operational decisions: vendors, systems, staffing, belong with the executive. Governance decisions, including changes to the policy itself, belong with the owners.

Collapsing the three into a single committee produces the worst of each: slow investing, over-governed operations, and under-governed governance.

For every recurring decision, record four things: who recommends, who decides, who must be consulted first, and who is informed afterwards. The map should be one page and reviewed annually.

Thresholds do the heavy lifting. A commitment under a stated amount and inside the investment policy is a CIO decision; above it, an investment committee decision; outside the policy entirely, an owner decision regardless of size.

Co-investment alongside the family, adviser selection, related-party leases, and employment of family members are the standard flashpoints. Each should have a pre-agreed procedure: disclosure, recusal, independent valuation where relevant, and a record of the decision.

Deciding the procedure while no one is conflicted is far easier than deciding it when someone is.

Authority granted without reporting becomes authority withdrawn at the first surprise. Pair every delegation with a scheduled report against the mandate: exposures versus policy limits, realised versus expected costs, exceptions and how they were resolved.

The point is not surveillance. It is making renewal of the mandate a routine event rather than a crisis response.

Decision rights held in the memory of a long-serving principal are not governance. Codify them in an operating manual that a new family director can read in an afternoon, with the decision map, thresholds, conflict procedures, and reporting calendar in one place.