When Corporate Governance Enables Abuse of Power in Sibling Partnerships- And Why Compassionate Governance Matters
Family enterprise governance must serve more than profit maximization and corporate compliance. If it is to safeguard relationships, wellbeing, and legacy, it requires design principles that recognise both the corporate and the family systems. Without inclusive structures, the same rules intended to protect shared assets can be used to consolidate power for the benefit of some family members to the detriment of others.
In non-family enterprises, governance is largely geared toward effective decision-making for profit, stakeholder value, and legal and regulatory compliance. In family enterprises, governance should also preserve harmony and the welfare of family, protect vulnerable members, and honour the intentions that built the legacy.
My advisory experience shows that rigid reliance on majority-rule corporate mechanisms — without regard for family dynamics — often enables dominant coalitions to make decisions that exclude or harm others. This is particularly visible in sibling-partnership ownership structures where rivalry is evident.
When Majority Rule Becomes a Tool of Control
Family boards that operate on simple majority voting — for example, 4 out of 6 siblings — create a structural imbalance that can be exploited. A dominant group can consistently push decisions through with little accountability, even when the outcomes materially affect other family members.
Case 1: Health Benefits During COVID-19
During the COVID-19 period, a dominant voting coalition removed essential health insurance benefits for one sibling. The decision, justified as a governance action, was intended to pressure the individual into compliance on a separate corporate matter. The outcome exposed a structural weakness: majority voting can be used to enforce power rather than uphold collective welfare.
Case 2: A Patriarch’s House Gift
A patriarch expressed a recorded wish that his youngest daughter receive a home — a gesture of protection and a recognition of her position within a patriarchal society. Despite legal acknowledgement of this wish, corporate structures were used to argue that the asset, held within a company, could not be gifted by him. This interpretation overlooked both his intention and his substantial contribution to the enterprise. It also revealed how majority control can override legacy values and relational ethics.
Both examples highlight a central risk: governance mechanisms, when detached from empathy and shared purpose, can be weaponised to override fairness.
The Case for Compassionate Governance
Compassionate governance demands transparency, not technical evasion. In families with histories of rivalry or exclusion, governance practiced with empathy becomes a restorative force. Without it, governance becomes a shield for injustice — and the resulting wounds persist across generations.
I advocate the following principles in sibling partnerships:
All siblings participate in all family boards to widen representation and reduce secrecy.
Broad consensus or unanimous decision-making for matters touching on welfare, legacy, or rights.
Shared purpose statements to anchor decisions in agreed values.
Investment in advisory stewardship to strengthen governance, communication, and emotional literacy.
Unanimous or consultative decision-making compels engagement. It encourages dialogue, ethical clarity, and empathy. It transforms governance from a contest of influence into a process of mutual understanding.
Reflection
Compassionate governance requires more than legal or regulatory adherence. It calls for ethical reasoning, shared purpose, and a commitment to fairness.
How can families ensure that their governance structures protect all members — not just those with the most votes?
I welcome your reflections.
About the Author
Wanja Michuki is a Family Business Coach, Advisor, and advocate for Compassionate Governance — a values-based approach to family enterprise stewardship grounded in inclusion, shared purpose, emotional literacy, and accountability.