Stewardship in family business refers to a leadership philosophy and practice where family members view their role as caretakers of the business. They aim to preserve and grow the enterprise for future generations rather than prioritizing short-term financial or personal gains.
Responsible stewardship emphasises a long-term perspective, accountability, and a deep sense of responsibility for the family legacy, the well-being of stakeholders, and the communities the family business serves.
In the intricate world of family businesses, where personal relationships intersect with professional goals, one principle stands above all others in ensuring long-term success: stewardship. Often described as the responsibility of current generations to manage and nurture the family’s business, wealth, and values for future generations, stewardship is the glue that holds family enterprises together across decades – and sometimes centuries.
At its core, stewardship transcends the simple notion of responsible ownership. It represents a commitment to preserving the family heritage and legacy while embracing innovation and change to ensure the business remains relevant across generations. In practice, stewardship encourages the development of next-generation successors, ensuring that future leaders are prepared to take on both the strategic, tactical, and operational responsibilities of the family business while sustaining strong familial relationships.
Stewardship also involves fostering a sense of shared purpose and responsibility across generations, promoting continuity and long-term stability in governance, leadership, and ownership structures. Understanding and practising stewardship is critical for business continuity and for maintaining family unity and identity over time.
Stewardship is not just a noble ideal in family business. It is a practical necessity for the long-term survival and growth of the business family’s legacy, and maintaining a successful family business across generations.
Here are five reasons why stewardship is vital:
Ensuring continuity across generations: The survival rate of family businesses beyond the third generation is notoriously low, often summarized by the saying, “Shirtsleeves to shirtsleeves in three generations.”
Stewardship challenges this narrative by encouraging business families and family business leaders to think beyond their tenure. By focusing on sustainable practices and preparing the next generation early, families can create a roadmap for continuity.
Succession planning is a key component of stewardship. Effective family businesses develop clear governance structures and long-term strategies to ensure a seamless transfer of leadership. This reduces uncertainty and builds confidence among stakeholders, employees, and family members.
The Wallenberg family of Sweden practices stewardship through their unique trust-controlled structure, which ensures long-term ownership and stability across their vast industrial and financial holdings.
The Wallenberg family’s main investment vehicles, Investor AB, and the Wallenberg Foundations, are governed by trusts rather than direct family ownership, which prevents fragmentation of wealth across generations.
While the companies are professionally managed, key family members, such as Marcus Wallenberg and Jacob Wallenberg, remain actively involved in strategic decision-making, ensuring continuity of values and leadership. Their stewardship emphasizes innovation, philanthropy, and reinvestment in society, particularly through significant funding for scientific research and education via the Wallenberg Foundations.
Balancing tradition and innovation: Family businesses often struggle to balance the weight of heritage and tradition with the need to innovate in rapidly evolving markets. Stewardship provides a framework for managing this balance. It emphasizes the importance of honouring the family’s history and values while also encouraging leaders to adapt and innovate adequately for the future.
Leaders driven by stewardship understand that clinging on to the past can be as damaging as reckless modernization. Instead, they adopt a values-based approach to change, ensuring that innovation aligns with the business family’s principles and long-term vision.
Promoting a culture of responsibility: In the absence of stewardship, entitlement can take root within family businesses. Future generations may begin to see the business as a birthright rather than a responsibility, leading to complacency, short-term financial gains or even conflict.
Stewardship combats this by fostering a sense of responsibility and accountability. By involving younger family members in decision-making processes and educating them on the business’s values and history, current family business leaders can ensure that the next generation understands the importance of their role and long-term obligations.
This culture of responsibility strengthens the family’s emotional connection to the business and enhances its resilience over time.
Strengthening the family legacy: Stewardship is not just about financial or business success – it is about preserving the family’s identity and legacy. Family businesses are often deeply intertwined with the communities they serve, and stewardship ensures that this connection remains intact.
Stewardship extends the family’s impact beyond the business itself through philanthropy, sustainability initiatives, and community engagement. These activities ensure that the family name remains associated with positive contributions, reinforcing identity and pride, and keeping the purpose across generations.
An example of this is Banyan Tree Group which was founded in 1994 by Ho Kwon Ping and Claire Chiang. Their first resort, Banyan Tree Phuket, pioneered the concept of combining luxury with sustainability, transforming a former tin mine site into an award-winning eco-resort.
Today the family-owned and Singapore-based hospitality company is renowned for its strong commitment to sustainability, social responsibility, and cultural preservation. Through initiatives like the Banyan Tree Global Foundation, they practice stewardship by integrating environmental conservation and community development into their luxury resorts, setting a benchmark for responsible tourism in the hospitality industry.
Enhancing reputation: A strong commitment to stewardship enhances the family business’s reputation, which is closely tied to the family’s identity. By consistently acting with integrity and responsibility, stewardship builds trust among customers, employees, and partners.
A well-regarded reputation helps attract high-quality talent, fosters long-term partnerships, and strengthens customer loyalty. Moreover, the positive perception of the family brand opens doors to new business and market opportunities, thereby reinforcing the family business legacy across generations.
Stewardship in a family business refers to the responsible and ethical management of the business with a focus on preserving and enhancing its long-term value for future generations. Stewardship goes beyond just running the business for short-term gains. It involves a commitment to sustainability, continuity, and the business’s and its stakeholders’ well-being over time.
The French luxury brand Hermès is renowned for its dedication to craftsmanship and quality. Hermès is family-controlled with the majority primarily owned by three families, all descendants of the company’s founder, Thierry Hermès. They have maintained control through a well-structured ownership model that preserves the Hermès legacy and heritage. The business families practice stewardship by ensuring sustainable growth and innovation while remaining true to the brand’s artisanal roots, passing down values and leadership through generations.
Key elements of stewardship in a family business include:
Long-term perspective: Stewardship emphasizes a long-term view rather than focusing solely on immediate profits. This involves making decisions that may not yield quick returns but contribute to the business’s sustainability and success in the future.
Ethical leadership: Stewards in a family business are expected to lead with integrity and adhere to ethical principles. This includes transparent communication, fairness, and a commitment to ethical business practices.
Transparency and accountability: Stewards are accountable for their actions and decisions. Transparency in financial matters, governance, and decision-making processes is crucial to building trust among family members and other stakeholders.
Succession planning: A key aspect of stewardship is planning for the smooth transition of leadership from one generation to the next. This involves identifying and preparing the next generation of leaders, ensuring a seamless transfer of knowledge and responsibility.
Community and social responsibility: Stewardship extends beyond the business itself and includes a commitment to the well-being of the community and society. Family businesses, as integral parts of communities, often engage in philanthropy, sustainable practices, and socially responsible initiatives.
Risk management: Stewards are responsible for identifying and managing risks that could affect the business in the long run. This includes financial risks, market changes, and other factors that could impact the business’s stability.
Preservation of family values: Stewardship often involves preserving and passing on the core values and principles that the family business was built upon. This can contribute to the continuity of the family legacy and the business’s identity.
Adaptability and innovation: Business family stewards must be open to change and innovation, and constantly adapt the business to evolving market conditions and technological advancements while maintaining the family’s core values.
In essence, stewardship in a family business is about being custodians of the business, ensuring its continued success, and passing it on to future generations in a strong and sustainable state.
By nurturing a culture of stewardship, family businesses become more than economic entities. Instead, they become institutions of social, cultural, and community significance. They are not just drivers of prosperity for their family owners but also catalysts for change, innovation, and shared value creation.
In this way, stewardship is not only critical for business sustainability but also for leaving behind a meaningful and enduring legacy – one that reflects the values and aspirations of the family, while continuing to inspire and benefit those who come next.
These are some of the steps business families can deploy to foster stewardship:
Define the core values and vision: Successful stewardship begins with clarity. Families must define and articulate their shared values, vision, and goals, ensuring that these become guiding principles for decision-making.
Develop the next generation: Stewardship thrives when the next generation is educated, mentored, and given opportunities to grow. Families should encourage external experiences, formal education, and leadership development to prepare future stewards.
Create governance structures: Family councils, advisory boards, and succession plans help institutionalize stewardship by providing frameworks for decision-making, conflict resolution, and leadership transitions.
Foster open communication: Regular family meetings and transparent discussions ensure alignment and build trust. Open dialogue about the family’s legacy, challenges, and opportunities reinforces the importance of stewardship.
Lead by example: Current leaders must model stewardship through their actions. By demonstrating a commitment to long-term thinking, shared responsibility, and ethical decision-making, they inspire future generations to adopt the same mindset.
Many global business families embody stewardship in diverse ways, with varying intents and approaches. For some, stewardship means nurturing a family legacy by upholding values and traditions; for others, it involves driving innovation to stay relevant in competitive markets. While the methods may differ, the underlying commitment to preserving and growing the family enterprise across generations remains central.
These families understand that successful stewardship is not just about safeguarding wealth but about creating enduring value for future generations, employees, and society. One compelling example of great and inspiring stewardship in action is the Kirk Kristiansen family, the controlling owners of the iconic Danish toy brand LEGO.
The Kirk Kristiansen family owns and manages the Danish toy brand LEGO. They exemplify exceptional stewardship through their dedication to preserving the LEGO company’s heritage, legacy, and values while fostering innovation and growth—a critical balance that requires hard and responsible work.
Since its inception in 1932, LEGO has remained a 100% family-owned business, guided by the principles of quality, creativity, and play. The business family’s long-term vision has ensured the LEGO brand’s vitality, relevance, and resilience – even during challenging times that most global typically businesses face.
One of the defining moments of stewardship for the Kirk Kristiansen family came in the early 2000s when LEGO faced a financial crisis. Instead of compromising the brand’s core principles, Kjeld Kirk Kristiansen, the third-generation leader, made the tough decision to restructure the company and focus on its core product—LEGO bricks. This decision, rooted in stewardship, not only saved the business but also laid the foundation for its resurgence as one of the most beloved and valuable global brands.
The family has further demonstrated stewardship by establishing the independent non-profit LEGO Foundation in 1986. It controls 25% of the LEGO company whereas KIRKBI, the fully owned family office of the Kirk Kristiansen family, controls the remaining 75%.
The foundation operates with a mission to make children’s lives better and communities stronger by making sure the fundamental value of play is understood, embraced, and acted upon. Every year, a significant portion of the LEGO company’s profits is dedicated to promoting learning through play for children worldwide. This commitment to social responsibility reflects the Kirk Kristiansen family’s belief in using the LEGO business as a platform for positive impact.
Today, under the leadership of chairman Thomas Kirk Kristiansen from the fourth generation, the family continues to uphold its stewardship philosophy. They have embraced sustainability as a key priority, with a bold commitment to using 100% sustainable materials in their products and packaging by 2030. This vision ensures that LEGO remains not only a profitable and innovative company but also one that aligns with global efforts to address environmental challenges.
Through their focus on heritage, legacy, sustainability, and innovation, the Kirk Kristiansen family has transformed LEGO into a symbol of enduring family stewardship. Their story serves as a powerful example of how a family can preserve its heritage and legacy while adapting to modern consumer and market demands. The Kirk Kristiansen family is ensuring that future family generations inherit not just a successful LEGO business but also a meaningful mission.
Stewardship transforms family businesses from fleeting ventures into enduring institutions. It goes beyond financial gains or operational success; it is about safeguarding a family’s shared legacy, nurturing its values, and fostering a deep sense of responsibility across generations. By prioritising long-term success over short-term financial gains, business families can navigate the complexities of multi-generational ownership and leadership, preserve their legacy, and create a business that is not only financially successful but also deeply meaningful.
Stewardship requires a mindset shift – from seeing the business as merely a financial asset to viewing it as a living entity that embodies the family’s history, vision, values, and purpose. Business families that embrace this philosophy understand that every decision they make today has the potential to influence not only the current state of the business but also the opportunities available to future generations.
It is this forward-thinking perspective that separates businesses that merely survive from those that thrive across centuries.
Ultimately, stewardship is about recognizing that a family business is more than just an asset. It is a shared story, a source of pride, and a platform for impact. It is the thread that connects generations, weaving together past achievements, present challenges, and future aspirations.
Families that embrace stewardship do not just pass down wealth or enterprises – they pass down purpose, resilience, and a vision for the future. They instil in each generation the understanding that the business is not a possession but a responsibility – a legacy to honour, protect, and grow across generations.
About the author: Martin Roll – Global Family Business & Family Office Expert
New book (2025): Family Business Strategy – Leading Future Paths With Impact
New book (2025): Family Office Strategy – Creating a Multi-Generation Legacy
Read more: The 3 Pillars of Success in Family Business: Family Unity, Harmony, and Cohesion
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