Why Every Founder and Family Office Needs a Governance Wake-Up Call
Staff Writer • 2025-09-29
Startups are exciting. They scale fast, disrupt markets, and raise eye-watering amounts of capital. But when the dust settles, many of them are held together with duct tape, no succession plan, no compliance, no governance. And eventually, no future. Remco Coerman has spent the past 25 years helping founders, family offices, and investors build the scaffolding behind their businesses. From Africa to the Middle East, he’s seen what happens when the back office is an afterthought. As global tax reform accelerates and the professionalization of wealth structures continues, Remco warns that founders who fail to structure early are setting themselves up for collapse. The End of Tax Arbitrage In the past, it was easy for multinational companies to open a mailbox in Ireland or the Caribbean and shift profits to low-tax jurisdictions. That playbook is obsolete. With the rollout of the global minimum tax, also known as OECD Pillar Two, governments are closing the gap on base erosion and profit shifting. “You used to just open an office and push profits there,” Remco says. “Now you need substance, structure, and serious compliance.” The rules are not being enforced equally. The United States has lobbied for a side-by-side approach, carving out exemptions for American multinationals and undermining the original idea of uniform enforcement. Remco sees this as another example of economic nationalism disguised as reform. “They sell it to their own population as if they’re protecting jobs and industry, but in the short term, it raises costs,” he explains. “The rest of the world isn’t waiting on the US. China is thriving without it.” Tax policies take years to filter into the macroeconomic bloodstream. By the time the impact of these measures is felt, the politicians who drafted them are long gone. For founders operating in multiple jurisdictions, the message is clear: don’t build a strategy based on yesterday’s tax regime. Governance First, Everything Else Second Remco emphasizes that the biggest risk to long-term wealth isn’t tax, it’s poor governance. This is especially true for the explosion of family offices in the UAE and other tax-advantaged regions. While many family offices are still seen as vehicles for wealth preservation, their operations now resemble full-scale investment firms. “Governance comes first. Without it, the best talent will leave, and your technology will be misused or underutilized,” Remco says. “Decision-making, accountability, and risk policies need to be in place before you grow.” The scale of governance isn’t always obvious. One of South Africa’s largest banks employs over 3,500 people just for governance-related roles. While family offices don’t need to match that headcount, they do need frameworks that enable visibility, reduce conflicts of interest, and withstand succession. The Investment Committee is Not Optional As family offices increasingly shift capital into private markets, the role of investment committees becomes more critical. Remco recommends building Chinese walls between decision-makers and beneficiaries. “You need an independent investment committee. Not your brother, not your cousin,” he says. “They need the authority to say yes or no to deals without emotional influence.” In Remco’s experience, the collapse of family structures is rarely about poor investment performance. It’s about death, succession, and the inevitable power struggle that follows. “Everything is fine as long as the parents are alive. As soon as they pass, everyone wants control,” he says. “You need a system that’s stronger than family emotion.” Properly drafted family constitutions, shareholder agreements with exit rules, and independent board members are essential. Without them, family offices risk turning legacy into litigation. Who Should Start a Family Office? The conventional wisdom is that family offices are for the ultra-wealthy. Remco disagrees. “We’ve helped clients with as little as €200,000 set up proper structures,” he says. “If you’re in a high-tax country, or worried about inheritance tax, you should consider it.” In practice, a family office is just a private company where children or heirs are shareholders. These vehicles can be set up in places like the UAE, Mauritius, or Singapore. The goal is not tax evasion but jurisdictional flexibility and long-term control. “The UK is getting crazy with tax,” he adds. “People joke about the return of the window tax. If you want to preserve your options, you need to look abroad.” Legacy is Fragile Without Structure According to one study, only one-third of family businesses survive into the second generation. That statistic shocked Remco too. “People assume wealth means security,” he says. “But money brings problems, especially among friends and family. Trust isn’t enough. You need guardrails.” In a world where global tax norms are evolving and intergenerational wealth is under pressure, governance is no longer optional. It is the foundation on which every family legacy, startup dream, and investment thesis must be built. As Remco puts it: “Make your money work for you. But protect it like a business, not a hobby.”
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