TL;DR: Charles Spencer argues that formal family charters — codified governance documents that define values, decision-making processes, and succession rules — are among the most effective tools available to wealthy families seeking to preserve both capital and cohesion across generations. For Asia-Pacific family office principals managing multigenerational wealth, the lesson is structurally urgent.

Why Family Charters Are Moving to the Centre of Succession Planning

Charles Spencer, the 9th Earl Spencer and brother of the late Princess Diana, has become an unlikely but compelling voice in the global conversation about multigenerational wealth preservation. Speaking at a series of family governance forums, Spencer has drawn on his own family's centuries of estate management to argue that written family charters — formal documents encoding a family's values, governance structures, and succession expectations — are not ceremonial artifacts but operational necessities. His core contention is straightforward: without a codified framework, even the most substantial family fortunes become vulnerable to the entropy of disagreement, divergent ambition, and generational drift.

The historical precedent Spencer invokes is striking. Japanese merchant families have maintained what are known as kakun — household rules — for centuries, with some documents dating back to the Edo period. One such rulebook, maintained by a trading house with roots in the 17th century, specifies not only inheritance protocols but the ethical standards expected of every family member who participates in business affairs. Modern family office practitioners are increasingly recognising that this approach — once dismissed as cultural peculiarity — maps directly onto the governance challenges facing ultra-high-net-worth families managing diversified global portfolios today.

What a Family Charter Actually Contains — and Why the Detail Matters

A well-constructed family charter is considerably more than a mission statement. Practitioners working with single-family offices across Singapore, Hong Kong, and Dubai describe documents that typically run to forty or more pages and address: the criteria by which family members may participate in investment committees; dispute resolution mechanisms that sit outside the court system; dividend and distribution policies tied to specific AUM thresholds; and protocols for bringing in professional non-family executives. In several structures operating under Singapore's Variable Capital Company framework, the charter effectively functions as a constitutional layer sitting above the VCC's articles of association, providing the family with a private governance instrument that the formal legal structure does not supply.

The financial stakes justify the effort. According to research cited by the Family Business Network, approximately 70% of family wealth is dissipated by the end of the second generation, and 90% by the third. For a founding generation that has built a business or investment portfolio worth USD 500 million — a figure increasingly common among Southeast Asian and Greater China family offices — that statistical trajectory represents a catastrophic erosion of legacy. Spencer's argument is that the charter functions as a corrective mechanism: by making expectations explicit and binding before conflict arises, families reduce the probability of the litigation, estrangement, and forced asset liquidation that typically accompany succession disputes.

Regional Governance Structures That Support Charter Implementation

For Asia-Pacific principals, the practical implementation of a family charter intersects directly with the regulatory and structural choices available in the region's leading family office jurisdictions. In Singapore, the Monetary Authority of Singapore's Section 13O and 13U fund exemption regimes — which require minimum AUM of SGD 20 million and SGD 50 million respectively — provide a formal investment vehicle around which charter-based governance can be organised. The VCC structure, introduced in 2020, allows sub-funds to be ring-fenced for different family branches, making it technically feasible to encode charter provisions about branch-level distributions directly into the fund architecture.

Hong Kong's Open-ended Fund Company structure offers comparable flexibility, while the DIFC in Dubai has seen a notable uptick in family office registrations from South and Southeast Asian families seeking a neutral jurisdiction for holding structures that span multiple geographies. Governance advisers operating across these centres consistently report that families which arrive with a draft charter — even an imperfect one — move through the structuring process significantly faster than those attempting to resolve values and decision-making authority simultaneously with legal documentation. The charter, in other words, is not merely a soft governance tool; it is a prerequisite for efficient hard-law structuring.

The Next-Gen Dimension: Embedding the Charter Before It Is Needed

Spencer's most pointed observation concerns timing. Families that attempt to draft a charter in the aftermath of a succession event — a founder's death, a divorce, or a business sale — are doing so under conditions of maximum emotional and financial stress. The document produced in those circumstances tends to reflect the power dynamics of the moment rather than the considered values of the family as a whole. By contrast, families that begin the charter process while the founding generation is still active, and that deliberately involve G2 and G3 members in drafting sessions, produce documents with substantially greater legitimacy and durability.

Several multi-family offices operating in Singapore and Hong Kong now offer facilitated charter development as a standalone service, recognising that the process itself — the structured conversations about values, risk appetite, and the role of wealth in family identity — generates governance clarity that no legal document alone can produce. For principals currently in the early stages of formalising their family office, the strategic implication is direct: the charter conversation should precede, not follow, decisions about jurisdiction, fund structure, and investment mandate. Getting the human architecture right is the precondition for getting the legal and financial architecture to hold.

Frequently Asked Questions

What is a family charter and how does it differ from a will or trust deed?

A family charter is a governance document that codifies a family's shared values, decision-making processes, dispute resolution mechanisms, and expectations for family member participation in the family office or business. Unlike a will, which is a legal instrument activated at death, or a trust deed, which governs a specific legal structure, a charter is a living document intended to guide behaviour across generations while the family is operational. It sits above legal structures as a constitutional framework and is typically revisited and updated on a regular cycle.

How does a family charter interact with Singapore's VCC or MAS fund exemption frameworks?

The charter operates as a private governance layer that complements but is separate from the formal legal documentation of a VCC or MAS-exempt fund. Principals can encode charter principles — such as branch-level distribution rules or investment committee eligibility criteria — into the fund's constitutional documents, but the charter itself provides the narrative and values context that gives those provisions legitimacy within the family. Governance advisers typically recommend aligning the charter review cycle with the fund's annual compliance calendar.

At what AUM level should a family begin formalising a charter?

There is no universally agreed threshold, but practitioners across Singapore, Hong Kong, and Dubai generally recommend beginning the charter process when a family's investable assets exceed USD 30–50 million, or when a second generation is approaching the age at which they might participate in governance. The MAS Section 13O exemption threshold of SGD 20 million provides one practical reference point: families establishing a formal fund structure at that level are already operating at a scale where governance failures carry material financial consequences.

Can a family charter be legally enforced?

In most jurisdictions, a family charter is not itself a legally binding contract, though specific provisions can be incorporated into shareholders' agreements, trust deeds, or employment contracts to give them enforceability. The charter's primary function is normative rather than legal: it creates shared expectations and a reference point for dispute resolution before disagreements escalate to litigation. Many families deliberately keep the charter outside the legal system to preserve its role as a trusted, flexible document rather than a source of adversarial claims.

How should next-generation members be involved in drafting a family charter?

Governance specialists consistently recommend involving G2 and G3 members in facilitated drafting sessions, even when they are not yet active in the family office. Participation builds legitimacy — members who help write the rules are more likely to respect them — and surfaces divergent values or expectations before they become sources of conflict. The founding generation typically retains final authority over the document's content, but the process of structured dialogue across generations is itself a significant governance output.

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