OWNERSHIP ALIGNMENT

Ownership in a family business can be a powerful and rewarding role. Families may consider day-to-day leadership and ownership of the business as one in the same. However ownership has its own distinct accountabilities separate from leading the business.

Owners steward the future of the business and make decisions on where to invest. They manage the trade offs between growth, risk, profitability and liquidity. Owners define what success looks like and oversee key performance indicators to ensure the business continues to be a strong investment. 

Ownership alignment is about finding a unified direction and common priorities. This typically becomes more complex as multiple generations become shareholders. Families may assume that because the owners are family they will unite; however, they often come with different experiences, goals and needs.

The best way to ensure a strong ownership foundation is to develop guidelines in the following areas:

• Clarify the role of an owner. What are the expectations and responsibilities? 
• Set criteria to quality to become an owner - make it more than a birthright
• Determine what decisions owners make and the aeras they will not interfere 
• Verify if owners need to actively work in the business. Will passive shareholders be considered? 
• Clarify the expectations of owners and how they will be held accountable 
• Determine what information will be shared with owners and the structure of the ownership forum
• Clarify the aligned vision of the future.  Get clear on how we expect the family enterprise assets to shift over time
• Set specific success criteria.  What key performance measures will we be monitoring?