The silent power of informal governance in family businesses

Because the org chart doesn’t show you who really holds the keys.

In family-owned, mid-sized companies, particularly within the Franco-German Mittelstand, leadership is rarely just formal. Authority is often invisible, relational, and coded. And for external executives, this can be difficult to decode.

Even the most qualified leaders can fail in this environment, not because they lack experience, but because they misread the dynamics.

What the org chart doesn’t reveal

In many of our advisory missions, we encounter quiet but decisive forms of influence:

• a founder who has formally stepped back, but remains involved in all strategic decisions

• a family advisor with no title, but significant operational weight

• a next-generation heir who subtly shapes internal alignments

These roles are not dysfunctional, but they are rarely documented and often overlooked.
And when they aren’t acknowledged, integration becomes fragile.

When informal governance is ignored

The risks are subtle, but real.

A new CEO initiates change, and meets unexpected resistance.
A CFO joins to lead transformation, but is bypassed in key decisions.
A GM steps in to lead, and discovers informal loyalties that override formal reporting lines.

These situations erode more than confidence in a role, they weaken trust in the company’s ability to integrate external leadership.

How we approach it at Cb-Advisory

Before introducing candidates, we conduct a governance review that includes both formal structures and informal dynamics.
We examine:

• who holds real operational authority

• who holds emotional legitimacy

• how decisions are actually shaped and endorsed

This allows us to brief candidates not only on structure, but on context.
We help them prepare for the system they are entering, not just the position they are filling.

Supporting multi-generational dynamics

When executive hiring overlaps with succession, we help facilitate dialogue across generations.
We work to clarify the future roles of family and external leaders, and to build a shared understanding of what transition requires.

This reduces friction, protects legacy, and gives new leadership the space it needs to succeed.

Why it matters

In family businesses, onboarding is not just about delivering results.
It is about entering a system built on memory, relationships, and unwritten codes.

Overlooking this dimension increases the risk of early misalignment, political isolation, and failed transitions.
And once trust is broken, it is rarely rebuilt quickly.

What you don’t see can break what you’ve built, because influence is not always where it’s written.