From the perspective of family shareholders, dividend policy is the most transparent element of corporate finance. Dividend policy addresses both how much cash flow should be distributed to shareholders and the ideal form of such distributions. In the context of a family business’s life cycle, directors can use dividend policy to manage the company’s capital structure and tailor the form of returns to better match family shareholder preferences. Diverse shareholder preferences and characteristics can enhance the attractiveness of share repurchases relative to dividends; however, executing share repurchases for family businesses bring its own set of considerations and challenges. The purpose of this whitepaper is to help family business directors formulate and communicate a dividend policy that contributes to family shareholder wealth and satisfaction.
This whitepaper is the fourth in the “Corporate Finance in 30 Minutes Series.” Learn more about the whitepaper series below.
- Corporate Finance in 30 Minutes
- In this whitepaper, we distill the fundamental principles of corporate finance into an accessible and non-technical primer.
- Capital Structure in 30 Minutes
- Through this whitepaper, we equip directors to contribute to capital structure decisions that promote the financial health and sustainability of the family business.
- Capital Budgeting in 30 Minutes
- Capital Budgeting in 30 Minutes assists directors in evaluating proposed capital projects and contributing to capital budgeting decisions that enhance value.
- Capital Budgeting in 30 Minutes assists directors in evaluating proposed capital projects and contributing to capital budgeting decisions that enhance value.
- Dividend Policy in 30 Minutes
- From the perspective of family shareholders, dividend policy is the most transparent element of corporate finance. This whitepaper helps family business directors formulate and communicate a dividend policy that contributes to family shareholder wealth and satisfaction.
