The turn of the calendar invites reflection.

Every board decision reveals what the family business’s priorities. The challenge is that many boards never quite say those priorities out loud. As a result, strategic finance decisions (capital investment, distribution and redemption policy, and long-term financing decisions) that feel inconsistent or contentious are often symptoms of deeper misalignment.

As 2026 begins, we suggest family business directors reflect on, and be more explicit about, the priorities that guide their decision making.

One approach for doing so is to consider a few “matched pairs” of alternative priorities.

1. Optionality or Conviction?

Some family businesses prize optionality. They maintain excess liquidity, avoid irreversible long-term commitments, and preserve balance sheet flexibility so they can adapt as markets, industries, or family circumstances change.

Others favor conviction. They choose a strategic path and commit meaningful capital to it—investing ahead of demand, accepting near-term risk, and going “all in” on a view of the future they believe in.

Both approaches can be rational. Optionality is valuable when uncertainty is high or when the family has not yet aligned around a long-term direction. Conviction is powerful when opportunities are clear and the family is prepared to stand behind a specific strategy through inevitable volatility.

Tension arises when boards speak the language of conviction while allocating capital as if optionality were the real priority—or vice versa. In 2026, are your strategic finance decisions designed to preserve flexibility, or to decisively pursue a selected path?

2. Growth or Resilience?

Growth is visible and easy to celebrate, while resilience is instead marked by the things that don’t happen. Yet resilience, whether manifest in conservative leverage, customer or product diversification, or cautious cash management practices, is often an implicit priority for family businesses.

Some families are willing to accept volatility in pursuit of growth and higher returns. Others place a premium on stability, especially when the family’s wealth and identity are bound up in the business.

Are your growth plans consistent with the level of risk your shareholders are truly willing to bear?  Growth strategies that outrun a family’s tolerance for risk tend to unravel at precisely the wrong time.

3. Reinvestment or Liquidity?

Every dollar of earnings can only be used once.

Reinvestment promises future cash flow and growth in value over time. Liquidity, through dividends or redemptions, provides current shareholders with income, the ability to diversify their personal investment portfolio, and greater personal financial flexibility. Both are legitimate priorities, but they often matter differently to different generations.

Senior generations often prioritize liquidity after decades of having their capital working in the business. Younger shareholders may favor reinvestment, perceiving opportunities for growth and accelerating capital appreciation.  Directors must navigate these competing priorities, whether they are acknowledged explicitly or not.

As you enter 2026, how are you and your fellow directors balancing the reinvestment and liquidity priorities?  Are your strategic finance decisions aligned with the company’s life cycle and the evolving needs of its shareholder base, or are they favoring one group at the expense of another?

4. Concentration or Diversification?

Many family businesses exist because earlier generations embraced the risk associated with lack of diversification. Founders and early owners often built wealth precisely by committing time, capital, and energy to a single enterprise rather than spreading their bets widely.

Over time, however, the sources of risk change. As the business grows and the shareholder base expands, family wealth can remain concentrated in that one asset. What once fueled wealth creation can eventually heighten the family’s economic vulnerability.

Some families elect to continue prioritizing concentration, accepting that risk in exchange for the opportunity for continuing out-sized returns. Others gradually shift toward broader diversification, using dividends, redemptions, or liquidity events to reduce reliance on a single enterprise as the primary store of family wealth even if doing so slows the rate at which wealth can build.

As you look to 2026, where is your family along the concentration-to-diversification continuum? And are your strategic finance decisions intentionally supporting that position, or simply carrying forward assumptions from an earlier stage of the family’s history?

Bringing It Together

New years don’t require new strategies, but the new year does provide a valuable opportunity for directors to identify the priorities (whether explicit or unspoken) that will guide decision making in 2026.

Family business boards that make the best strategic finance decisions are rarely those with the most precise forecasts. They are the ones that are clear about what they are prioritizing, communicate those priorities openly, and revisit them as circumstances change.

As 2026 begins, clarity may turn out to be one of your family business’s most valuable assets.