Why Every Family Office Needs a Constitution: Rishabh Shroff

Family businesses in India have spent generations learning to build great companies. Fewer learnt how to run their money. As India's business families grow richer, family offices (FOs) have quietly become the most powerful seat in the enterprise that almost no one is watching: large pools of capital, deployed at real consequence, answerable to barely any outside authority and increasingly handed early to the next generation. But whom does the FO actually answer to?

The scale is no longer trivial. India has around 400 FOs, overseeing an estimated $30bn that may cross $45bn soon. Between 2020 and 2025, they backed over 450 private equity (PE) and venture capital (VC) deals, with average cheques doubling to $8–12mn. This is serious money. Yet, how they are governed remains an afterthought in many families. Key questions decide the outcome: who runs the office, who is accountable for its performance and how it links to the family business that feeds it.

Three Models

Indian families have answered the 'who runs the FO' question in different ways, which represents a spectrum of accountability.

The first is the professionalised FO, run almost entirely by non-family professionals. These usually comprise former PE professionals, bankers, chief financial officers (CFOs), analysts, lawyers. Here, the family takes a passive role, more focused on setting the vision and overall direction, whilst the execution and investment choices are left to the chief executive (CEO).

Premji Invest is the exemplar, with over $10bn in assets under management (AUM) and an 80-plus member team, set up by Wipro founder Azim Premji. It has a non-family CEO and investment team, with decision-making ring-fenced from Wipro’s operations, whilst a next-generation family member chairs the listed company.

Such FOs are usually accountable to a benchmark, an internal-investment committee and often a financial upside for the professionals. Such scale is aspirational, but expensive and demands mature leadership to work.

The second is the next-generation-driven FO. Across India Inc, family business scions are moving towards running an FO as a full-time job. They see this as a more aspirational career choice, giving more freedom to operate than directly joining the family business. Their families see this as a stepping stone towards eventual enterprise leadership. Rishabh Mariwala, of Sharrp Ventures (and of Marico lineage), is representative of this trend.

The model has its critics: Kotak Mahindra Bank’s founder Uday Kotak warned in 2025 that too many heirs take “the easy way out” rather than build companies. RPG Enterprises’ chairman Harsh Goenka lampooned them by saying these heirs prefer passive income and active vacations, compared to sweating it out.

The model has its critics: Kotak Mahindra Bank’s founder Uday Kotak warned in 2025 that too many heirs take “the easy way out” rather than build companies. RPG Enterprises’ chairman Harsh Goenka lampooned them by saying these heirs prefer passive income and active vacations, compared to sweating it out.

With no professional/CEO in between, the scion answers directly upward, to a parent, and to little else. Emotions may dominate financial metrics—no one is really going to fire their child as the chief investment officer (CIO).

Between these two is the most mature model: the council-governed office. Here, neither a lone professional nor a lone scion is sovereign. A family council oversees the FO and sets its vision; an investment committee, ideally with an independent voice(s), governs it; an executive, either from family or hired, runs it against a written mandate. Whilst common in many European families, it is slowly making inroads in India. Burman Family Holdings, of Dabur’s Burman family, set India’s benchmark for the same decades ago, placing a family council between the family and operating companies, convening quarterly after results to take the CEO’s report. This model is the hardest to build. And is the only one that answers to the family as an institution rather than to an individual

Family Business Link

Regardless of the model, one question remains: accountability to whom, and for what?

The FO does not exist in a vacuum. It is funded by the family business, it holds the family's collective wealth and it owes the family an answer. That answer should not depend on who runs it.

Ideally, an FO is not treated as a free-floating economic structure separate from the family business. Instead, it functions as a key pillar of the family’s overall personal wealth and succession plan, and ties into the underlying operating businesses. An FO represents the family’s collective financial asset and economic security—and hence how it is governed and held accountable is a collective choice by the family.

One such way to manifest these choices is via a family constitution, which can act as the ‘guidebook’ on how the operating businesses are run, in terms of ownership and governance, usually by senior members of the family; and how the FO is run, with accountability towards the family. It is the keystone of the third model. Accountability is built into the model, not assumed.

A family council composed of senior family members reviews the performance of the FO (both family and non-family) against a pre-approved investment policy, based on the objective goals and requirements of the family. It does not matter who leads the FO. They are equally accountable to their fellow family members for the returns on the family’s wealth.

A professional is measured against a fiscal benchmark; a scion is often measured against nothing but a parent’s mood. A mature FO applies one yardstick to both.

To answer my opening question, craft a constitution that works for the family and holds the FO accountable. The FO is where a family’s biggest asset meets its smallest scrutiny—and whether it answers to an institution or to one person is the real test of whether the wealth outlives the founder.

The writer is partner, co-head, private client, and head, international business development, Cyril Amarchand Mangaldas