Family Business Director

September 16, 2019 Capital Budgeting

FAQ: How Should Financing Affect Capital Budgeting Decisions?

Family business directors must properly distinguish between capital structure and capital budgeting decisions to make the best decisions.  In this week’s post, we answer a frequently asked question that leads us into a discussion of what is known as the “separation principle.”  In short, what are the relevant cash flows for capital budgeting analysis?  And, when is it appropriate to combine investing and financing decisions?  If you have ever struggled with these questions, this week’s post has the answers you need.

September 9, 2019 Performance Measurement

Five Reasons Your Family Business Should Focus on ROIC

Return on invested capital is not a silver bullet – it will not solve all of the challenges facing your family business.  However, when we let the data speak for itself, the benefits of ROIC are undeniable. This week, we identify five reasons family businesses should focus on ROIC.

August 29, 2019 Performance Measurement

Are Metrics Really Undermining Your Family Business?

This month’s cover story in the Harvard Business Review takes aim at the misuse of metrics in businesses, highlighting the tendency of leaders to confuse numbers with strategy. In this post, we consider how to apply the authors’ suggestions in the context of family businesses.

August 26, 2019 Special Topics

Family Business Industry Spotlight: Auto Dealer Industry

This week’s post is a part of a periodic series called “Family Business Industry Spotlights.”  In these posts, we will share conversations with our family business advisory professionals who have deep experience working with family businesses in a particular industry.  We think the conversations promise to be of interest to family business directors regardless of their industry.  This week, we talk with Scott A. Womack about the challenges and industry trends facing families in the Auto Dealer Industry.

August 19, 2019 Dividend Policy

A Guide to Corporate Finance Fundamentals

Part 4 | Finance Basics: Distribution Policy

This post is the fourth and final installment from our Corporate Finance in 30 Minutes whitepaper. In this series of posts, we walk through the three key decisions of capital structure, capital budgeting, and dividend policy to assist family business directors and shareholders without a finance background to make relevant and meaningful contributions to the most consequential financial decisions all companies must make. This week, we focus on distribution policy.

August 12, 2019 Shareholder Engagement

Buying Off the Discount Rack?

Recent headlines around publicly-traded family business Nordstrom, Inc. illustrate the challenges family business directors face when making hard decisions about family management, stock ownership, and whether to sell the family business. In this post, we take a closer look at where Nordstrom finds itself, and the range of options available to the directors for moving forward.

August 5, 2019 Performance Measurement

Return on Invested Capital: Digging a Little Deeper

The best performance metrics address not just “what” performance has been in the past, but reveal the “why” behind that performance and give direction for “how” to improve performance in the future.  In last week’s post, we introduced return on invested capital (ROIC) as a comprehensive performance measure for family businesses.  In this week’s post, we will dig a little deeper with ROIC, demonstrating how we can use ROIC to answer the “what,” “why,” and “how” questions for your family business.

July 29, 2019 Performance Measurement

And Now You Know… The Rest of the Story

Revenue growth and profitability are critical measures for the health of any family business, but by themselves, they tell only half of the story.  As a family business director, you need the whole story.  We’re not aware that Paul Harvey was a financial analyst, but if he were, we suspect his favorite performance metric would have been return on invested capital, because it tells you the rest of the story.

July 22, 2019 Capital Budgeting

A Guide to Corporate Finance Fundamentals

Part 3 | Finance Basics: Capital Budgeting

This post is the third of four installments from our Corporate Finance in 30 Minutes whitepaper. In this series of posts, we walk through the three key decisions of capital structure, capital budgeting, and dividend policy to assist family business directors and shareholders without a finance background to make relevant and meaningful contributions to the most consequential financial decisions all companies must make. This week, we focus on capital budgeting.

July 15, 2019 Shareholder Engagement

Innovation and Family Wealth

Recently published academic research from Vasiliki Kosmidou and Manju K. Ahuja highlights the relationship between innovation and family wealth. Our goal in this post is to introduce some of the authors’ most relevant findings to family business directors, translating, as we do, into a less academic idiom.