When the non-family chairman/CEO unexpectedly told family business owners that they had to live without dividends or sell the business, Tommy leaned over and whispered in his cousin’s ear: “Do you get what’s going on? The numbers have always been terrific.”
Signs You’re Losing Control of Your Family Business
These red flags signal the need to reassert authority.
April 07, 2017
Summary.
When the families that own a company move out of day-to-day management, they often become disengaged, content to collect dividends, and behave passively at board meetings. Sometimes, that leads a non-family manager to try to take control of the firm. There are five red flags that should signal family-firm owners that non-family management is taking steps to grab power: dividends never change; board meetings are a formality; too much or too little information is provided; the CEO seems irreplaceable; and family members are shut out of the business. If these issues apply to your business, you may decide it’s time to sell. But if you want to keep your business, you’ll have to become a more active owner.