How do I know if a family member in the business is actually qualified for the role?

Ask one question. Could this person do this exact job somewhere else and succeed. Kris Kluver, in The Dysfunctional Family Office, gives this test directly. If yes, compensate accordingly. If no, build an improvement plan with clear metrics, support them, root for them, but hold them fully accountable for owning their seat. The test removes the family discount that protects underperforming family members. It also removes the family premium that promotes capable family members past where they would land outside the family. The test creates space for honest conversations. When someone is struggling and the accountability process is handled well, it's often a relief for the person involved. They knew they were failing. They were just stuck in their own conflict-avoidance, afraid of letting the family down. Helping them find a seat they'll thrive in serves them better than protecting them in a seat that doesn't fit.