A family constitution (sometimes called a family charter) is a governance document that provides useful guidance for the family’s decision-making and functioning. Like constitutions for many public and private entities, it captures the main policies and procedures that define how the family may operate under standard and exceptional conditions. The process by which a family negotiates and decides on the provisions of a family constitution are as important as the end result of the document itself.

Typical components of family constitutions include the following:

• Mission statement: A short but important section outlining the values, goals, purposes, and guiding principles of the family, its enterprise, and its wealth.

• Systems: Provisions describing the setup and operation of governance mechanisms such as a family council, family assembly, standing or ad hoc committees, task forces, and enduring policies (e.g., family employment policy, distribution policy, education policy). Decision-making models and voting thresholds may be designated.

• Membership and participation: Provisions describing who is considered within the bounds of the family, who may be on the family council, how council members may be designated, member removal or replacement provisions, tenure of leadership or term of office, and related provisions.

• Conflict management and resolution: Provisions for surfacing, discussing, and resolving conflicts between individuals or branches within the family, including the procedures used, whether external resources may or must be tapped, and how resolutions may be monitored or enforced.  Provisions may also include orderly mechanisms for the exit of family members or their exclusion.

• Relationship to other family enterprise entities and governance systems: Provisions for collaboration or coordination with owners groups, boards, family offices, foundations, and other elements of the family enterprise.

A family constitution is not a legally-binding document. It is enforceable by the general consent of those governed by the document.  Constitutions typically may be amended periodically by processes specified in its provisions.