Increasingly, owning families rely on an array of policies intended to guide future decisions and actions. They may address who can serve on the family council or the board, set compensation for next generation members, determine whether in-laws can own stock or guide how profits will be deployed (re-invested or paid out to shareholders).
In our experience, an important quality a sustainable policy will have is that the reason or rationale for why the policy was written is explained in the form of a preamble or some sort of introduction. When preambles describe the philosophical basis of the policy, it conveys the intent of the policy. It’s akin to understanding the meaning or intent of a law as compared to the letter of the law. A policy that doesn’t convey the intent may be difficult to interpret or enforce as holes or ambiguous language is put to the test in later years.