When it comes to financial matters, family business directors need to treat family shareholders as, well, shareholders. One of the ironies of family business is the generally unspoken assumption that family shareholders are not entitled to adequate financial disclosure and transparency. In other words, family shareholders are often entrusted with far less information than stockholders in public companies. Whatever benefits such secrecy generates are very quickly overwhelmed by the suspicion, distrust, and discontent that naturally develops when communication fails. Positive engagement is enhanced when family shareholders receive regular communication under five primary headings which are discussed in this week’s post.
