Family Business Advisory Services

May 30, 2017

Corporate Finance Basics for Directors and Shareholders

To craft an effective corporate strategy, management and directors must answer the three fundamental questions of corporate finance.

  1. The Capital Structure question:  What is the most efficient mix of capital?
  2. The Capital Budgeting question:  Which projects merit investment?
  3. The Dividend Policy question:  What mix of returns do shareholders desire?

These questions should not be viewed as the special preserve of the finance team.  To maintain a healthy governance culture, all directors and shareholders need to have a voice in how these long-term decisions are made.  This presentation is an example of the topics that we cover in education sessions with directors and shareholders.  The purpose of the presentation is to provide directors and shareholders with a conceptual framework and vocabulary to help contribute to answering the three fundamental questions.

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Three Things to Make Your Family Business More Valuable
Three Things to Make Your Family Business More Valuable
A decade of public-company returns offers three lessons for building family business value: sustain momentum through reinvestment, apply discipline to capital allocation, and build credibility with shareholders. These principles can help managers and directors evaluate investment decisions and strengthen confidence in the company’s future.
What Directors Should Know About the Valuation
What Directors Should Know About the Valuation
Family business directors need to understand the assumptions, methods, and changes behind a valuation, not just the final number. A thoughtful annual review and regular shareholder communication can support informed decisions and reduce surprises before an ownership transaction.

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