Risk & Crisis Management
Build resilience in your family enterprise
The Challenge
The 21st Century has ushered in an era of unparalleled prosperity and increased uncertainty. This has forced families to consider a more holistic approach to enterprise risk management — one that integrates common threats to business continuity with risks for the owning family.
Our Solution
LGA’s Crisis and Risk Management advisory is based on the fundamental belief that risk is best managed from a systems perspective. Families need to manage risk to their operating businesses and investment portfolios as carefully as they manage risk originating in their ownership structure and family dynamics.
Any of these risks present a threat to successful continuity and should be monitored and managed within a holistic Family Enterprise Risk Management (FERM) framework.
LGA’s Crisis and Risk Management advisory takes your family through the FERM framework, starting with a comprehensive assessment of the key risks facing your family enterprise and mapping those risks based on their potential impact.
- Identify and prioritize the key risks facing your family enterprise
- Assess the risk appetite and risk capacity of owners and defining your risk culture
- Synthesize this data into strategic guidelines for executives, the Board and the family
How does it work?
With this map in hand, we conduct interviews to understand the distribution of risk appetite (i.e., psychological willingness to take risks) and risk capacity (i.e., the financial capacity to bear risks) both at the individual and aggregated level for all owners.
Understanding the enterprise’s risk culture is also critical to ensure its consistency with any processes, policies, and distributed authority throughout the system.
We use this information to create risk appetite statements and FERM dashboards, which provide a clear overview of risk across the system and clear guidance to the board and senior leadership teams to inform their decision-making.
LGA’s advisors also help families manage acute crises, in particular for families who operate in environments with chronically elevated risks.
Many enterprising families in these contexts have learned to cope with increased volatility and uncertainty by avoiding it outright (for instance, by not doing business in conflict zones). Others use a collection of adaptive strategies to make these environments more stable, safe, and profitable. We can help you diagnose risk in your unique context and explore adaptive strategies to support your enterprise continuity.
LGA’s Crisis and Risk Management advisory includes:
- Providing owners and boards with a general education about family enterprise risks and crisis management techniques
- Assessing the family’s resilience to existing and emerging external risks, such as inflation, geopolitical instability, and climate change
- Exploring individual and collective risk profiles and how they evolve over time
- Managing the distribution of different risk profiles across a diverse sibling or cousins system
- Sharing tools to support discussions about risk at the Board, the C-suite, and the Family Council
- Building action plans to support conversations about risk within key internal and external stakeholders
- Building processes, policies, governance, and tools for ongoing risk monitoring and management
- Building processes, policies, governance, and tools for emergency crisis management
How does your family benefit?
Your family enterprise will emerge with the policies, processes, and structures needed to face uncertainty with confidence.
Case Studies
Case Study: Launching a Family Office
The second-generation CEO of a large family enterprise was approached by a strategic investor who made a generous and unsolicited offer for their legacy operating business. The CEO had previously never explored a sale — both because of her strong emotional connection to the company and its employees — two of whom were her kids — and because of its attractive cash flow and growth profile.
Case Study: Sustaining Engagement in a Cousins Consortium
Three third-generation Family Directors of a large enterprising family were attending a global conference focused on innovation and growth. Their 90-year old family had deep pride and gratitude for the success and leadership of previous generations. However, there were no family members currently working actively in the business, and the family’s only connection to their vast operations — which spanned eight industries and three continents — was limited to these three members of the Board.
Related Insights
Protecting the family legacy starts in the family office
Many families have decided to formalize a Family Office to serve the financial and professional needs of family members.
We partner with your key advisors to support the family and the enterprise
As a result of our expertise, we are able to assist families across the spectrum of needs.
What is the impact of political polarization on family businesses?
In principle, everyone in a family business, from shareholders and board members to executives and employees, has a right to their own politics.
Educating family business owners
We conceptualize two interrelated approaches to education: a deductive or “outside-in” approach.
Crisis Management: Four strategies family business leaders can use to navigate a crisis
Devin DeCiantis describes four strategies that family business leaders can use to navigate a crisis.
What is the point of family enterprise governance?
Business, ownership and family issues are intertwined in a way that is going to get very complicated.
Featured advisors
Devin DeCiantis
Devin has been advising and teaching for over a decade and specializes in the financial, organizational, and strategic aspects of complex family enterprises.
Dimitris Valatsas
Dimitris specializes in helping family enterprises and family offices navigate complex geopolitical, financial, and macroeconomic challenges.
Bob Kohli
Bob has decades of experience as a global advisor, predominantly in the Middle East and South Asia, with a focus on strategic planning and governance.
