The Missing Link in Family Business Transition: Emotional Governance with Franco Lombardo

What if the real risk to your family business transition isn’t tax strategy or structure, but unspoken emotions? 

In this episode, Elizabeth Ledoux welcomes Franco Lombardo to explore the concept of emotional governance and why creating safe space within family systems may be the missing link in long-term legacy success. 

Franco shares how his own journey from wealth management to family dynamics work began with confronting shame and misaligned purpose. From there, the conversation dives deep into sibling rivalry, entitlement, silence between generations, and why many families invest heavily in governance structures but very little in emotional maturity. 

If you are navigating transition, preparing heirs, or feeling tension beneath the surface of your family business, this episode will challenge you to look deeper. 

Key Topics Covered: 

• What emotional governance actually means and why it matters 

• Why families break down slowly, not suddenly 

• The danger of silence in family systems 

• The disconnect between generations around preparedness 

• Why entitlement often stems from parental rescue patterns 

• The importance of addressing emotional maturity before wealth transfer 

Franco also shares insights from his newly released research study on emotional disconnection in family enterprises, available via his LinkedIn profile. 

Chapters in this episode:

00:00 Introduction to Franco Lombardo and Safe Space 
01:15 Franco’s Personal Journey from Wealth to Purpose 
03:30 Understanding Emotional Governance 
06:57 What Is a Safe Space? 
09:19 Triggers and Choosing Behavior 
11:18 Why Ignoring Emotions Is Dangerous 
15:27 Research Findings: The Generational Disconnect 
18:10 Founder Fear and Silence 
20:56 The “Coddled Child” Pattern in Family Business 
23:03 Entitlement and Parental Rescue 
25:50 Final Thought: Feelings Do Not Define You 
26:59 New Book Announcement 

Connect with Franco Lombardo: 

Website: https://www.veritage.ca/ 
LinkedIn: https://www.linkedin.com/in/franco-lombardo-275108/ 
Research Study: Available via LinkedIn (type “research” in message request) 

Connect with Elizabeth Ledoux and the Transition Strategists: 
Website: https://transitionstrategists.com/ 
Facebook: https://www.facebook.com/thetransitionstrategists 
Elizabeth on LinkedIn: https://www.linkedin.com/in/elizabethledoux/ 
Transition Strategists on LinkedIn: https://www.linkedin.com/company/transitionstrategists/ 
Transition Strategists on YouTube: https://www.youtube.com/@transitionstrategists 

Subscribe to “The Business Transition Roadmap with Elizabeth Ledoux” on your favorite podcast player: 
Spotify: https://spoti.fi/3MxSYA2 
Apple Podcasts: https://apple.co/3IhMMux 

Get Elizabeth Ledoux and Laura Chiesman’s latest book, “It’s A Journey: The MUST-HAVE Roadmap to Successful Succession Planning”: https://amzn.to/3oq2LQv

The Missing Link in Family Business Transition: Emotional Governance with Franco Lombardo Transcript

Elizabeth Ledoux: Hi everybody and welcome back to the Business Transition Roadmap. On our podcast today, I’m Elizabeth Ledoux as you know, and we are just so thrilled to have Franco Lombardo with us. He is just an incredible person and I love his belief that we all want to feel safe.

and not just safe in our lives, but safe in our relationships, within our environments, and also within our wealth. For more than 20 years, he has been a family business advisor, a coach, a facilitator, and he’s worked with some of the world’s largest, most successful affluent families, helping them to foster a culture of what he calls safe space.

He’s been a mentor and been able to develop next-gens. He’s done emotional governance for the family and he’s also written five books. His latest is Safe Space Governance in Action. Franco, welcome today and maybe start by telling us a little bit about how you got into doing this in the first place.

Francesco Lombardo: So Elizabeth, first of all, thank you so much for having me on your show. It’s a real privilege and an honor to serve your audience. So, you know, I come from the wealth management world and I was successful at it. And yet I felt an emptiness and a meaningless to what I was doing.

Elizabeth Ledoux:
Thank you.

Francesco Lombardo:
And I was curious about that and I decided to hire a coach to help me unpackage and unravel that. And what he helped me realize was that I was leading my life based on the wrong purpose. I was pursuing money because I thought if I accumulate a lot of money, then that’ll hide the shame that I had inside of me because of my childhood. And as I started to unpack this and unravel,

Elizabeth Ledoux:
Wow.

Francesco Lombardo:
I started to realize that I had a deeper purpose. As my accountant said to me once, says, know, Franco, you’re operating at about 2 % of your capacity. Yeah, you’re making money, but it’s meaningless. And I remember when I first heard that I was like, my God, I don’t like you right now. And I’m kind of angry and I’m considering firing you.

Fortunately, I didn’t. I processed and came back and went, okay, so what do do with that? So that’s how I got on the journey.

Elizabeth Ledoux:
Nice. Wow, that’s an incredible story. Yeah, emotionally to be able to take that comment and turn it into something productive that really actually probably changed your trajectory completely.

Francesco Lombardo:
100%, you know, so, you now I’m very blessed and fortunate to work with some very amazing families and really get to have some conversations that is a privilege to be a part of and to help them understand, you know, what’s their narrative? What’s the story that’s running the show? Because as I tell families that I work with and whenever I speak is,

You know, everything we do, we do for a reason. We just don’t know what that reason is. And that reason is actually based on our narrative or our conditioning or what we call our emotional governing systems.

Elizabeth Ledoux:
Talk a little bit more about that so we understand what that emotional governance is.

Francesco Lombardo:
So, you know, we think that we are in charge of our responses, but in reality, we’re not. You know, so when someone is speaking to us, you particularly in a family business context, you if we have a sibling talking to us or a parent talking to us or a child talking to us, we get triggered. We get emotionally triggered based on our wound, right? So my trigger has been around abandonment and has been around, you know what, that I’ve done something wrong.

And there are times, up until recently, that if a family said, we’re not ready to work with you, I would take that deeply personal. I would make it about, what did I do wrong? It’s my fault versus maybe not ready. Maybe they say they want to do the work, but they’re not really committed to doing the work. A variety of reasons, but it’s not really about me. So the emotional governing system runs the show.

Right? And as I was able to unpackage mine being around abandonment and shame and wounds, I’m able to react differently now in any situation.

Elizabeth Ledoux:
Right. So some of the work that you’re doing is helping people to actually understand some of their personal emotional governance, help them to identify maybe some of those triggers, and then understand how to interact with each other in a family like that.

Francesco Lombardo:
Yeah.

Yes, so we define emotional governance as having your emotions in such tight regulation that they’re an asset, not a liability to yourself in the system. Right? So effectively, we help adults manage the child within that has unprocessed trauma.

Elizabeth Ledoux:
which is, yeah.

Elizabeth Ledoux:
Wow, that sounds so, it sounds so amazing and so much like a psychologist. So in your work coming out of that financial background and that financial world, you’ve really morphed into this personal side.

Francesco Lombardo:
Yeah, you know, and I just want to be clear, you know, we’re not a psychologist, we’re not a therapist, we’re not a counselor, we’re a coach. So what we do is we ask the obvious questions that people have been avoiding or haven’t known to ask. Like, you know, why do you think you behave that way? Why do you think you react that way? Where is that coming from?

Elizabeth Ledoux:
Yes.

Elizabeth Ledoux:
Yeah, so being a master person that produces incredible questions.

Francesco Lombardo:
Yeah, yeah, you know, we ask the obvious question that people don’t want to look at or have been avoiding or frankly haven’t had the awareness to ask themselves that.

Elizabeth Ledoux:
Yeah. So tell us a little bit about how that ties into the idea of then a safe space and being safe not only with yourself, your environment, but also with your wealth.

Francesco Lombardo:
Yeah, so safe space is a concept that I came up with in my fifth book. And by the way, we have another book coming out in a couple of months. So happy to talk about that. I’m really excited about that project. So safe space is basically, as you said in the introduction, one of our basic human needs is we want to feel emotionally safe with ourselves, in our relationships, and with our wealth.

Now what am I mean by being safe with myself? What I mean by that is being okay with all parts of me, the good, the bad, and the ugly. Because human beings, we are so afraid of feeling the pain of the past and facing the fears that we have. So we create these constructs to avoid all that stuff.

Elizabeth Ledoux:
Hmm.

Francesco Lombardo:
Being in a safe space is saying, you know what, I’m gonna go and feel the pain that I felt in the past and I’m gonna go face my fears, whatever they may be. So being emotionally mature to be able to say, I’m gonna take charge of my emotions. And the other thing is, I wanna share with this with the audiences, your emotions are not who you are.

Just because I felt shame doesn’t mean I’m shameful. It’s an emotion that I felt and I get to choose whether I want to hang on to that one or let it go.

Elizabeth Ledoux:
Absolutely. Yeah, because we all have that choice. We have that choice of how we navigate and how we react to things that trigger us. Just earlier today, we’re preparing to do a one-hour session with just really diving deep into triggers and what the different types of triggers are and just understanding that,

There are different things that can trigger us. And then we always have a choice of how we react and whether we can catch ourselves in that reaction and that interaction, right, or not, or not. And some of what you’re saying there is about that safe space, right? How can you do that?

Francesco Lombardo:
Yeah.

Francesco Lombardo:
Yeah. You know, and to recognize that, you know, we are going to get triggered is how do we, how do we react? How do we behave? And I said, tell my clients, what’s the behavior you choose versus the behavior choosing you.

Elizabeth Ledoux:
Yeah, that’s a deep one.

Francesco Lombardo:
And what happens is, know, if Elizabeth, you and I are in a conversation and I get triggered, the moment I’m triggered, I’m in my wound and often in my narrative and I’m completely out of the conversation already. So as we, as we coach our clients, listen, when you get triggered, just go, I just got triggered. I’m going to use the tool that Franco gives us, which we call the awareness tool. And I’m going to go to that in a minute, but I’m going to stay in the conversation.

Elizabeth Ledoux:
Nice. So talk a little bit about, yeah, what are some best practices as people enter and think through this transition journey that they’re on? Because some of the foundations on my side is that transition is a journey. It hopefully is not an event. Because if it’s an event, typically is abrupt and people are panicked, then it really

Even if it’s planned, it’s still a little chaotic, if not very chaotic. We want to try not to make it an event. I like that. Then the other thing is that it is about money. However, the relationships are so valuable in a transition of any kind. Talk a little bit about, because you’re on that side of the people side.

What are some things that people do that maybe they miss and what are some best practices as they go through this, I guess, season in their lives?

Francesco Lombardo:
Well, I think the first thing to really acknowledge and be mindful of is that emotions are inherent in every single decision we make. And neglecting their importance as an afterthought is dangerous and in my opinion irresponsible. Because families don’t break up all of a sudden. They break up over time because the emotions aren’t addressed or talked about.

Elizabeth Ledoux:
Hmm.

Francesco Lombardo:
Right? So for you listeners, it’s okay to say, we’ve got emotional challenges. We’ve got family dynamics that we need to address. Right? And ignoring those is at your peril. You will become a statistic, it’s guaranteed. It’s not if, it’s when.

So focus on the emotions. The other thing is, you know, human beings are really great at saying, you know what, I really want to lose weight. I want to learn how to communicate better.

but no action. I was recently speaking at an event and I got an email from a participant saying, you know what, really want, really interested in what you do. We’ve made communication our priority for this year for the family, but we’re really busy. So we’ll get to when we get to it. So, as my COO says, you vote with your calendar. Your calendar tells you what really matters to you.

And a lot of family businesses out there, and this is going to offend a lot of people and that’s okay because I deliver the truth, the truth sometimes isn’t pleasant. A lot of family businesses will say, my family really matters. But when the rubber meets the road, they’re not investing in the family dynamics and family relationships.

They spend money on structures and governance and investment policies. And that creates wealth and they haven’t done anything to prepare themselves for the wealth of God. So no wonder there’s conflict.

Elizabeth Ledoux:
Absolutely. Well, and not only prepare themselves, but also prepare the heirs, right, who are going to take this over. And, you know, from my perspective and also from my experience, part of the fun of the journey is with the family interacting around the, you know, the dynamics of the wealth and what the wealth

not the big trips and everything that I can bring you on that front, but just the knowledge of, gosh, how to manage it and the responsibility of it and also how to enjoy it. Not just protect it, but how to enjoy it and even how to enjoy it with different types of kids, different ages, different interests. This can be so curated and so designed to meet

Francesco Lombardo:
100%.

Elizabeth Ledoux:
the human being’s needs instead of the structure’s needs.

Francesco Lombardo:
100%. And I think what happens is a lot of current generation family members plan for the kids with their advisors as opposed to with the kids and the advisors.

Elizabeth Ledoux:
Yeah.

Elizabeth Ledoux:
Yes. Yeah, we find that all the time. my curiosity sits there and I’ll ask you, Franco, because I have some theories behind this that I’ve thought about. And I know some of the ideas and the concepts, but what do you think sits behind those parents, if you will, or the wealth creators, the wealth owners today?

What fears stand there? Why don’t they talk to their kids? What’s your opinion on that? And I know you just did a survey and you have a research paper that just came out.

Francesco Lombardo:
Yeah, so you know, the number one enemy of family businesses and actually of any relationship is silence.

And what happens is when when patriarchs and matriarchs and let’s go back that their primary role is going to be apparent, that’s the dominant natural role, is they believe that when it comes to talking about the emotional issues, they got to bring up the numbers.

And that’s not the case. what happens is, we just, as you just mentioned, we just completed our research, which has got launched on LinkedIn today. So if you want to get a free copy, just go on my LinkedIn profile, right? And just type in research and we’ll send you a complimentary copy, right? And because we did it just to, because we want to give back to this industry, you know? So what we found was, and this will answer your question, there’s a massive disconnection.

between the current generation and the next generation. So I’ll give you three examples. So number one is the current generation believes that preparedness, how the kids are prepared or ready is based on skills and inviting them to boards and family meetings. The current generation, their belief of preparedness is, I emotionally ready? Am I heard? Am I seen and I’m understood? Do I have the ability to freely express myself?

Number two, we ask the current generation, we had six emotional challenges that are common for all families. And by the way, not one respondent said, we don’t have one of these. Every single one picked one. Because remember, emotions are inherent in every decision we make. So the founding generation said sibling rivalry and entitlement, top two issues, obviously from a parental lens. The next generation, lack of communication control.

Elizabeth Ledoux:
Mmm.

Francesco Lombardo:
And if the other interesting statistic is, I would say about 52, 53 % of them had traditional governance, yet almost 70 % said that these do not deal with family dynamics. And when asked what are you doing about it?

Elizabeth Ledoux:
Yeah.

Elizabeth Ledoux:
Not much. Not much. Well, and I think that some of that is behind that, I’ll call them the transitioning generation. I think some of that is in their defense, not knowing what to do. mean, seriously, not knowing. Yeah.

Francesco Lombardo:
100%, and if we go a little bit deeper, I can’t tell you how many founders I’ve worked with that have said to me, I’m at this place and I don’t know who to talk to. I’ve accumulated the wealth and I’ve got these adult children and I’m ready to transition either the wealth or the ownership of the assets.

Elizabeth Ledoux:
Yeah.

Francesco Lombardo:
And I don’t know what to do. And by the way, I’m really scared because I’ve never dealt with this before. So for you founders listening, what you’re feeling is absolutely normal and okay. It’s what you do with those feelings that matter. So if you keep it to yourself, not a good thing.

Elizabeth Ledoux:
Absolutely.

Francesco Lombardo:
Reach out to someone like Elizabeth or other professionals and say, you know, I’ve got this stuff. I don’t know what to do. Can you help me please?

Elizabeth Ledoux:
Absolutely. Yeah, and you know, and there, this is as far as, know, and you’re in it too, Franco. Yeah, reaching out to you, we’ve got wealthy families going your direction as well, because this is an emerging industry for people who are trying to go through this well. We have plenty of examples of people who have gone through it and the statistics are, you know, more failure than success by far. And

So yeah, it is, it’s newer and people are bringing human beings into the picture and into the equation where I think in the past it’s been mostly about trust and protection of wealth and now they’re starting to try to figure out how to use this wealth for the benefit of, again, the human beings and their relationships.

Francesco Lombardo:
Yeah, you know, the reason we did the research is because people want empirical proof. Well, now we’ve got proof that these are issues. know, it’s, it’s, a, very proud of it. It’s a phenomenal piece of research. And as I said, you know, if you want access to it, just go on our LinkedIn page, click in research. We’ll gladly send it to you.

Elizabeth Ledoux:
Absolutely. At the end of the show, we’ll have all of that LinkedIn information and their website information as well because I think it’s available on your website as well. That’s great. As we wander through, this has been a great conversation. What I’d like to do is ask you a super open-ended question as we get closer to the end of our session here.

Francesco Lombardo:
Correct. Yes.

Elizabeth Ledoux:
As when you’ve seen families walking into some of this type of transition in the work that you’ve done, where do you see them falling down the most? Just in the beginning.

Francesco Lombardo:
Almost every family that I’ve worked with has the one child that has been not held to account. They have been coddled, they have been saved, not been held accountable for their actions. And that child, when we start working with families, could be in their 40s and 50s.

and they’re a spoiled brat because the parents created that. And until that child is held to account, they become the…

Francesco Lombardo:
the biggest challenge in the family. I’m working with a couple of families right now where in which particular case the mom, well, always making excuses, right? And the child has never been held to account and he’s 50.

Elizabeth Ledoux:
Hmm.

Elizabeth Ledoux:
Yeah. Yep. And don’t you think that that, at least from my perspective, especially as, yeah, I work with many, many, many wealth creators who are the wealth creators. It’s not generationally inherited. And now that they don’t have an example of a family life where there was success in the transition.

And so I think it’s one of the number one fears. I asked you earlier what’s one of the number one fears that keeps people from talking about wealth. And I think it’s that entitlement not being held or not being able to hold someone accountable because they know you have the wealth, your child, and they know that you’ll bail them out. And so that entitlement, I think, is one of the biggest fears and kind of gates.

roadblocks that keeps these parents from moving forward.

Francesco Lombardo:
Yeah, and what happens is the price of poker goes up every single time. The bailout is bigger and bigger and bigger until finally the parent goes, I can’t do this.

Elizabeth Ledoux:
Yeah, yeah. And then I guess the next question, Franco, is, it fixable?

Francesco Lombardo:
Yes, if there’s a genuine desire, right? But there has to be desire to get really honest. And typically when we’re at that stage, people are pretty fixed in their ways. So it’s difficult to change, right?

Elizabeth Ledoux:
Yeah.

Elizabeth Ledoux:
Yeah, well, and I would think that the, I mean, personally, I’ve seen it to be fixable also. The pain of it, it would have been much easier if they would have fixed it earlier because the pain that just embedded behavior and the embedded, yeah, in shifting people’s lives completely from being well cared for and I don’t have to do anything to.

Francesco Lombardo:
Yeah.

Elizabeth Ledoux:
my gosh, I’m 50 and I actually have to figure it out now. Would have been easier when I was 20. Yeah. my gosh. Incredible. Since we’re living longer, those 50-year-olds have another 50 years. Yeah, it is lessons learned along the way that I just think about a sense of urgency in a family to begin at an earlier time.

Francesco Lombardo:
Yeah, I gotta get a job. Imagine that.

Elizabeth Ledoux:
when they can develop and use time as their friend, instead of time as their enemy.

Francesco Lombardo:
Yes, that’s the ideal world and unfortunately, families say families matter, but it really doesn’t because they’re more interested in growing the business, doing that piece because it’s frankly easier.

Elizabeth Ledoux:
Yeah.

Elizabeth Ledoux:
Yeah, relationships and especially family relationships are kind of tough, aren’t they?

Francesco Lombardo:
Yeah, you know, we’re very blessed to work with some amazing families that are really courageous and truly committed to family. That’s why they work with us.

Elizabeth Ledoux:
Yeah, I can see that. Well, and you’re experts in the field, so in what you do, absolutely incredible. You’re welcome. It’s true. As we wrap up here, because I know we’re right at our time, I always like to ask for one final thought.

Francesco Lombardo:
Thank you.

Elizabeth Ledoux:
that you would like to leave with the audience just to help them in their journey. So what would be one thing that you’d like to leave with them today?

Francesco Lombardo:
those things called feelings, it’s okay to have them.

Elizabeth Ledoux:
Hmm. Wow.

Francesco Lombardo:
and those feelings don’t define who you are. They’re like the weather, they pass.

Elizabeth Ledoux:
Awesome, awesome. Those are amazing words to end on. So gosh, Franco, thank you so much for your time today and for being with us and for all the knowledge and the wisdom that you shared. And I’d love to encourage everybody to go out. And I pulled up on the website. It’s called The Missing Link in Family Business Transitions, How Emotional Disconnection Threatens Family Legacy.

I think there’s a lot of information that you can glean from this. My wish for you is that you will take a step, that you’ll do it sooner than later, and that you’ll create a sense of urgency knowing that transition is a journey and it can be a very, very fun and emotionally safe and positive experience. Anyway, Franco, thank you again.

Francesco Lombardo:
You’re most welcome. And just would like to let the audience know that we have a new book coming out in a couple of months. It’s called What Your Parents Didn’t Tell You. And we’ve used history and pop culture to illustrate some of our concepts.

Elizabeth Ledoux:
Hmm

Francesco Lombardo:
And we’re going to be doing pre-orders before it comes out with some really cool giveaways, some thought leadership pieces. So if people want to look at that, we’re going to give a whole bunch of tools for people to use to say that, you know what, emotions are okay to have.

Elizabeth Ledoux:
That’s great. Well, as that comes available, make sure that you let us know so that we can send it out to our audience too and let them know that it’s coming.

Francesco Lombardo:
Wonderful Elizabeth. Thank you so much been a real privilege and honor being your show and I love the work you do so please keep it up

Elizabeth Ledoux:
Well, and I love the work that you’re doing as well. So yeah, we’ll stay on this track together. All right. Thank you.

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The Business Transition Roadmap with Elizabeth Ledoux

How do communities thrive? When businesses experience healthy growth and transition. Join CEO of The Transition Strategists, Elizabeth Ledoux as she and her guests identify what makes a successful business transition roadmap. If you know you want to transition or exit your business “one day”, today is the right day to start planning. This show will give you the roadmap.

If you’ve enjoyed this podcast, you can check out other episodes here: Podcasts – The Transition Strategists