The Fragile Family Enterprise—How UHNW Families Preserve Wealth, Cohesion, and Business Continuity
From the MGD Private Pulse series
Insights for UHNW individuals and family enterprises.
It often starts simply: a successful founder, a family working together, a shared understanding—but then life evolves.
Family enterprises rarely unravel in a moment; they stretch as life adds complexity and the relationships around it become more layered. Generations branch. In-laws arrive. One child wants to step up; another wants to step away. Marriages end and families blend. Boards expand. Advisers rotate. A shared story becomes a constellation of siloed households, advisers, values, and interests.
This edition of MGD Private Pulse features insights from Brett Schmidt, the Executive Chairman and Head of Family Office Advisory at MGD Private. He has worked alongside a number of Australia’s most prominent family enterprises to design governance frameworks that preserve not just capital, but cohesion and continuity.
“In our work with families who continue to own and direct significant enterprises, we find that family cohesion and business continuity often hinge on a shared, coordinated approach to decision-making—not merely on who holds title or authority. Family Enterprise Governance provides the missing architecture: a framework that aligns interests, values, and voices—so decisions reflect both the family’s values and the enterprise’s long-term direction, especially through periods of pressure and change.”
The Limits of Legal Scaffolding
Wills, trust deeds, and company constitutions create legal authority and do essential work—yet they rarely answer the practical questions that determine day-to-day stability. They do not map delegation during a handover or clarify when a next-generation member has voice versus vote. Nor do they define the flow of capital across business, economic, and personal interests.
“There’s often a sound legal scaffold, but the operating system of the family enterprise is almost always missing.”
When Cohesion Fails, Economic Interests Suffer and Litigation Follows
When family enterprises lack structured resolution pathways and rely solely on either goodwill or legal documents, unresolvable disagreements will often default to litigation.
Consider the extended legal battles of the Rinehart or Murdoch families: deep pockets mean the disputes can continue even longer using the very assets meant to benefit future generations. Reputationally, the enterprise becomes less known for what it builds, and more for what the family cannot resolve.
Legal estimates suggest that around 1 in 10 Australian wills are contested, with the rate believed to be higher for large, complex estates. In New South Wales, family provision claims have increased by 62% between 2020 and 2024. In Queensland, contested probate matters more than tripled over the same period.¹ ²
“When a family doesn’t have a place to resolve conflict, the courtroom becomes the forum. We’ve seen families navigate such disputes only to find the deeper loss was not capital, but cohesion: siblings who no longer meet, grandchildren who grow up disconnected.”
Success Is Not a Succession Plan
Multiple international surveys suggest that only around 30% of family businesses successfully transition to second-generation leadership, with the rate dropping sharply beyond that.³
Research indicates that, in many cases, transitions falter not due to lack of capability, but because governance frameworks are absent or untested—leaving families without a clear process to manage succession and complexity as the enterprise evolves.⁴ ⁵ PwC’s Global Family Business Survey found that “families who treat governance as an enabler—not a constraint—tend to transition more effectively.”⁴
“Without an agreed system to manage transitions, complexity builds quietly until it becomes unmanageable. Key-person risk crystallises. Strategic decisions stall. Credibility with partners and investors erodes.”
The Need for Family Enterprise Governance
Family Enterprise Governance is a written and lived framework for coordinating the people and structures involved in a family’s wealth and enterprises. When governance is made explicit, a family does not become conflict-free—it becomes conflict-capable.
These pillars reflect the key dimensions of MGD Private’s Family Enterprise Governance framework:
Family Governance
A shared understanding of purpose, roles and decision rights. This may include a Family Charter, a structured Family Council, intergenerational alignment, and defined succession pathways that develop capability. In many cases, these elements are formalised within a Family Office. Whether a Family Office is already established or still evolving, MGD Private’s multi-family office capability enables us to engage as counsel within your existing framework or fulfil that role directly.
Corporate Governance
Many of our clients remain deeply involved in operating businesses. We guide them in applying institutional-grade governance—establishing boards, charters, and policies that honour what built the business while also positioning the business for future leadership and strategic growth. Robust corporate governance not only protects the enterprise, but supports credibility with investors, successors, and future acquirers. This work is often facilitated through a dedicated Corporate Office or internal advisory board structure.
Investment Governance
As wealth grows across a complex ecosystem of enterprises and entities, decisions about how capital is committed, retained, or distributed can become complex. Establishing clear governance helps family enterprises stay coordinated and confident in those decisions, while giving their professional advisers a clear framework to coordinate their work in alignment with shared priorities.
Advice Partnerships
We believe an open-architecture model is critical to facilitate access to exceptional advice without constraint and pursue opportunities without limitation. At MGD Private, we partner with a rare tier of legal, tax, investment, governance, and transaction specialists—advisers typically accessible only through institutional networks.
“Governance across these four domains does not constrain the family. It protects its ability to preserve cohesion as roles evolve, to make timely decisions, and to contain disagreement within constructive forums that remain private.”
Our Role
At MGD Private, we help build and sustain the frameworks that preserve far more than wealth.
Our role is to help assess governance maturity, identify areas of risk, translate principles into practice, and steward continuity with care. Sometimes that means coordinating a Family Council or succession pathway. Sometimes it means integrating governance across a growing web of business activity and financial structures.
In every case, our objective is consistent: to bring discretion, discipline, and enduring care to the operating model that supports your legacy.
“Ambitious families don’t stand still. They’re expanding their business, launching new ventures, backing causes, or supporting the ambitions of the next generation. Governance, done well, empowers them to do more—but with greater unity and impact.”
Is governance keeping pace with your family enterprise?
The most resilient family enterprises don’t wait for conflict or transition—they build frameworks that grow with them, so they’re ready for any challenge or opportunity. If you’d like to review the maturity of your governance structures or identify areas of risk, we can help. Learn more about our MGD Private team.
MGD Private Pulse is a series from MGD Private exploring the issues that matter most to ultra-high-net-worth individuals and family enterprises. MGD Private represents the specialist private-client capability within MGD Group, guiding Australia’s leading business families who continue to own and shape significant enterprises with discretion, precision and enduring care.
