For more than 20 years, Francesco Lombardo has been working with some of the world’s most successful and affluent families to foster a culture of emotional safety.
A background in wealth management, combined with his own personal journey, led him to identifying a universal connection between people’s association with money and the impact this has on their relationships, family, business and legacy.
On a mission to change the way families approached governance and succession planning, Lombardo set up his global advisory firm, Veritage, to help families build a legacy based on a foundation of shared values, not just assets.
“Over the years I witnessed the deterioration and inevitable collapse of many of these family owned businesses, because although they appeared to be successful on paper they were crumbling on the inside,” he explains.
“While they had a nice set of shiny documents neatly filed away collecting dust, their fractured relationships were contributing to the demise of the company.”
With an ever-changing economic landscape, and in today’s complex and hyper-connected world, the future is much harder to predict. So, while family owned enterprises have largely weathered past storms, the need to invest in the emotional and relational elements to secure a smooth transition can’t be ignored and is perhaps why Veritage has seen a recent increase in interest for its services.
“The past few years have been a wake-up call for even the most affluent of families, and many are now realizing the need for healthy relationships in order to remain resilient and agile,” Lombardo says.
Central to Veritage’s business model is the belief that a safe space is the key to a successful family business, and that it can only be unlocked by having relationships that operate through a shared prism of truth.
“It saddened me to see those with massive financial wealth not feeling emotionally safe with each other. They were so fearful of speaking their truth that an undercurrent of disharmony bubbled away and inevitably their relationships and businesses suffered.”
“It saddened me to see those with massive financial wealth not feeling emotionally safe with each other,” Lombardo reflects. “They were so fearful of speaking their truth that an undercurrent of disharmony bubbled away and inevitably their relationships and businesses suffered.”
From the outside, the two words ‘emotion’ and ‘governance’ may sound like an oxymoron. The Latin verb of ‘governance’ means to ‘direct and govern’ whereas ‘emotion’ means to ‘remove, displace, move out of’. But as Lombardo suggests, the two can work together as an opportunity to ensure family business longevity.
“What makes a sustainable and successful family business are the ones who have two sets of governance,” he points out. “One that takes care of the daily operations – policies, procedures and rules – and another that is entirely focused on how every individual in the business is treated as a human being from an emotional perspective.”
Leading by example
Through a tried and tested process developed by Lombardo called ‘Organized Emotional Governance’, Veritage begins the initial process with a client by cultivating individual safety. Only when each member understands what their safe space is, do they then move to the next stage of helping the group as whole to define what their guiding principles are.
But what sets Veritage apart is that while most advisers often stop here, the company goes to the next level by identifying the action that can be measured. It develops guiding principles that hold people accountable and can be reviewed, monitored and adjusted accordingly.
Veritage is certainly a company that leads by example, and under Lombardo’s leadership he has built a culture and environment where employees feel proud and safe to express themselves freely.
“One of our key building blocks focuses on repairing the family unease, which in turn improves the bottom line and increases the longevity of the business.”
He is keen to praise his team who have helped to grow the company while at times needing to adjust to the changing needs and demands of its clients. “Veritage has its own set of shared values and guiding principles, which are also fundamental to our strategy,” he reveals.
“One of our key building blocks focuses on repairing the family unease, which in turn improves the bottom line and increases the longevity of the business. We provide our clients with the tools to develop a shared set of pillar principles crafted by the family, for the family.”
Lombardo says that you can have a perfectly neat document that says this is how you hold a board meeting, but if you have an undercurrent of entitlement, jealousy and resentment then that document becomes ineffective. He recalls one particular family that struggled to separate the emotional relationship from the professional.
“They were caught up in a sibling dispute that had nothing to do with the business, yet the fallout from it was having dire consequences,” he remembers. “We helped them become emotionally aware of themselves, so that they felt able to express their feelings, and consequently create a mutual respect for their roles within the business.”
The humans within
Lombardo’s willingness to be so vulnerable and honest with himself and those he works with has led him to being somewhat of a maverick in the family business space.
He explains that many families and high-net-worth individuals come to Veritage seeking improved communication, succession planning and next-generation leadership development, only to find out that none of this is possible without first feeling safe enough with each other to have truthful conversations.
It can be all too easy in business to focus on the external factors, but Lombardo believes that the biggest risks to any organization are the humans within it.
He says he helps clients realize that the most valuable asset in their entire portfolio is the human being. “Once you invest in yourself and become more emotionally aware, you feel safe to have an honest conversation and in turn become more valuable to yourself, to the group and to the business.”
“People hire us because they seek the truth. We don’t find the truth in governance structures; we find it in ourselves.”
Veritage adopts a human-first approach, which is why its model is becoming increasingly attractive to the next generation who seek a more holistic path. Lombardo refers to a recent conversation with a family owner whose son was struggling with his sense of purpose and lack of self-validation.
“The father called me up and asked me if I would work with his son because while his son had been to see a business coach, what he really needed was a human coach to deal with his humanness – his insecurities, fears and doubts,” he recalls.
“The family becomes so disconnected from their feelings that they try to create emotional security through their financial wealth, when it is their relationship with their money that is magnifying their insecurities.”
‘The truth agent’ was a term coined by one of Lombardo’s clients and certainly feels fitting for a man who is forensically truthful with himself. His mission to reimagine the way traditional governance models are designed, implemented and measured is just what the family office space needs, even those who don’t yet know it.
“People hire us because they seek the truth,” he says. “We don’t find the truth in governance structures; we find it in ourselves.”