[Photo: An ancient olive tree outside our apartment on holiday]

We became rather fond of this tree.

It stood outside our apartment, clearly far older than the holiday complex that had grown up around it, older, probably, than anyone currently staying there. Its trunk was gnarled and weathered, its roots spread wide and deep into the ground, holding firm against decades, maybe centuries, of wind and weather and whatever else an olive tree in Menorca has had to withstand.

It looked directly onto the children’s play area. Every morning, watching the kids run about, climb, shout, fall over and get straight back up again, that tree simply stood there. Watching. Not interfering. Not directing. Just present: rooted, steady, quietly keeping an eye on things from a distance.

I found myself thinking about governance.

Not the word most people associate with holidays, admittedly. But governance in a family business is exactly that tree.

It isn’t about day-to-day involvement; that’s not its job, and trying to make it that job usually causes more harm than good. Good governance is rooted somewhere stable, watching the activity below with care, ready to notice if something genuinely needs attention, but otherwise letting the next generation run about, fall over, and get back up again without someone hovering at their shoulder.

The families I see struggle with governance are usually struggling with exactly that distinction.

Either there’s no tree at all, no oversight, nothing rooted, nobody watching the wider picture, or the tree has wandered into the middle of the playground, trying to be involved in every game, every disagreement, every decision, when its real value was always in being present, rooted, and just slightly apart.

The best governance, like the best trees, has been there long enough to have deep roots, and is secure enough in itself not to need to be in the middle of everything to matter.

That tree will probably outlive the building around it. The children playing beneath it will grow up, and others will take their place, and it will still be standing there. Watching. Steady. Doing exactly what it’s always done.

Rooted, Not Hovering: What Family Businesses Get Wrong About Governance

This week I wrote about an ancient olive tree outside our holiday apartment, standing quietly over the children’s play area below. It got me thinking about governance, a word most people associate with paperwork and committees, but which is really, at its best, exactly what that tree was doing. Governance is one of the most misunderstood words in family business.

Mention it to most founders and you’ll get a slightly weary look, an assumption that you’re about to suggest more meetings, more bureaucracy, more layers between decision and action.

But properly understood, governance isn’t about control. It’s about rootedness. It’s the quiet, steady presence that watches over the activity below without needing to direct every move within it.
 

The two failure modes

In my experience, family businesses tend to fail at governance in one of two opposite directions.

The first is no governance at all. No formal structure for decision-making, no clarity on who decides what, no regular forum where strategic issues are discussed away from day-to-day operational pressure.

This works, for a while, particularly in smaller businesses with a single dominant founder. But as the business grows, the absence of any rooted oversight becomes a genuine liability.

The second failure mode is the opposite: governance that has wandered into the middle of the playground.

A board, or a controlling family member, that involves itself in every operational decision, every hire, every minor dispute, leaving no space for the next generation to actually run things.

This kind of governance isn’t rooted and watchful; it’s anxious and intrusive, and it tends to suffocate exactly the initiative and ownership that a family business needs from its next generation in order to thrive.
 

What good governance actually looks like

The tree outside our apartment offered, unintentionally, almost a perfect model.

It was rooted somewhere stable, clearly established, clearly not going anywhere. It watched the activity below with what looked almost like care. But it didn’t interfere. The children ran, fell, got back up, ran again, entirely unsupervised by the tree, because the tree’s role was never to manage their play.

Good family business governance works the same way. It establishes clear structures: a board or family council that meets regularly, with genuine authority over the matters that should sit above day-to-day operations.

But having established that structure, good governance then steps back from daily operations almost entirely, trusting the people closer to the ground to run things, intervening only when something genuinely requires its attention.
 

Why this distinction matters so much

Family businesses that get this balance right tend to share a particular quality: the next generation feels genuinely trusted to run things, while still knowing that a stable, watchful structure exists above them if something serious requires attention.

That combination, trust plus stability, is remarkably hard to achieve, and remarkably valuable when it is.

Families that get the balance wrong tend to suffer in one of two predictable ways.

Either decisions are made too reactively, without any forum forcing important questions to be properly addressed, or the next generation becomes disengaged and frustrated, never quite trusted to make decisions stick without interference from above. The tree outside our apartment will likely outlive the building around it. It was there long before the play area was built, and it will probably be there long after. Its value was never in being involved in every game played beneath its branches.
Its value was in being rooted, stable, and quietly present, exactly the role governance should play in a family business that wants to last as long as that tree has. If your family business’s governance structure feels either entirely absent or far too involved in the day to day, it might be worth a conversation about what the right balance looks like for you.
peter@familybusinessman.com