What do your shareholders really think?

Tools like shareholder surveys, advisor panel discussions and family ownership councils can help board leaders tap into shareholders' true feelings.

The board meeting you chaired adjourns and the executive team members pat themselves on the back for another productive meeting. Some hard decisions had to be made, but everyone was in alignment — or so it seemed. Later that day, a text pops up on your screen: “Do you have a few minutes to chat?” It's from a family shareholder, who says the meeting didn't quite go as they expected. They feel their views weren't communicated to the board, and now tension is brewing.

The text confuses you. Hadn't there been ample opportunity to speak up? Thinking back on it, some shareholders had expressed unease about the direction the company settled on. When was the last time the shareholders — as a group, not just Mom or Uncle Bob — provided guidance to the board on shareholder expectations?

The diverse skills and mindsets among your family owners offer a valuable opportunity to shape and elevate the enterprise. It's important to remember that the collective views and expectations of family shareholders serve as the bedrock that supports and drives the business forward.

Assessing shareholder sentiment, formally and informally, is vital to keeping a multigenerational family enterprise healthy, vibrant and aligned. To address potential tension and unease, it is essential to create space for varied opinions and dissenting voices. So how can you find out what family shareholders truly want, and how can you make sure they are heard? Here’s a few practices to consider.

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Formal Methods of Assessing Shareholder Sentiment

  • Conduct regular shareholder surveys. Because the market, household composition and family developmental stages change rapidly, it's advisable to conduct a comprehensive shareholder survey every other year. These surveys allow family members to articulate their goals, expectations and needs as shareholders. This regular feedback keeps the board informed and ensures clarity on what is expected, serving as a valuable longitudinal benchmark for the enterprise.
  • Create, document and communicate a set of shareholder objectives based on the survey results. Sometimes high-level broad principles and values work best, especially if you have a strong independent board in place. Objectives may include providing a fair return on equity, making the company a great place to work and ensuring that staff at all levels care deeply for clients and customers. These three objectives communicate a set of expectations around growth and culture. The board and management might create performance indicators based on shareholder expectations.
  • Create a family ownership council to serve as a conduit between the board and the family shareholder group. The ownership council plays a crucial role in establishing a clear line of communication between the family shareholders and the board of directors. Family ownership councils are distinct from family councils, which typically address issues involving all family members, not just those who are shareholders.
  • Develop an annual review of your growth, risk, income, profit and liquidity expectations. Your family ownership council might run the exercise. Once a baseline is established for these metrics, full family input may no longer be necessary. Ideally, this review is done in collaboration with the board, but the family shareholders or their representatives need to be the “authors” of the work.
  • Establish good ‘just-in-time' processes. When an opportunity or challenge falls outside the strategic plan or stated values, management and the board may hesitate to act without shareholder input. Implementing a simple process for gathering time-sensitive feedback is essential for empowering leadership to act. A concise one-page document can outline how management flags the issue, brings it to the board and, if needed, how the board frames a clear question for shareholders. The family ownership council can then consult with shareholders, setting and communicating a firm response deadline. After the feedback is collected, it is given to the board and management for a final decision or action.

Informal Methods of Assessing Shareholder Sentiment

  • Communicate early and often. Strong boards and management teams have a good handle on the strategic themes that are emerging in the market, in the business itself and in the ownership group. As these challenges or opportunities coalesce into an identifiable pattern or theme, the board may wish to inform the shareholders of the emerging picture and gather feedback before modifying strategy or adjusting the trajectory of the enterprise. This preemptive review of themes, concepts or patterns with the family ensures that everyone stays informed — and, often, aligned — well in advance of any significant shareholder or board-level decisions. For example, think about how essential rapid communication among management, the board and shareholders became during the pandemic. The open line of communication about changing conditions truly saved many family companies from even more dire circumstances.
  • Leverage family insiders. Family members in leadership positions should consistently share both good and bad news. Being authentic and appropriately candid, while maintaining fidelity to one's role, goes a long way in promoting trust across the family enterprise. However, it is important to avoid oversharing or asking for input on decisions that are not the shareholders' to make.  
  • Get social. Not every person will feel comfortable contributing in the same way. Casual conversations, regular check-ins and social gatherings offer leaders opportunities to understand shareholder concerns and aspirations that might not emerge in formal settings. These interactions help leaders stay connected with the family, allowing them to address potential issues early and maintain open lines of communication. Follow up with a summary of any action items or feedback, and ask permission to socialize those concerns at a broader level. Building and sustaining trust through these relationships is vital. Still, it's important to balance this with respect for boundaries, ensuring that roles and responsibilities within the enterprise remain clear and well-defined.

A Note on Engagement, Opportunity and Speaking Up

Families may still encounter pushback and resentment from shareholders despite providing ample opportunities for input during board meetings and receiving little feedback before a decision is made. It’s important to remember that participation is an opportunity, not a requirement. However, it must be clearly communicated that the board meeting is the designated forum for input. If discontent persists after a meeting, review the opportunities that were provided for feedback and ask how the process might have been improved to address concerns.

Meeting family shareholders where they are is crucial. If emailed surveys are repeatedly ignored, consider trying a different approach. Ask shareholders how they prefer to receive information — perhaps sending the survey via text or using a family portal would be more effective. Automated survey reminders can be helpful and, for important topics, don't hesitate to reach out directly via phone call or text.

Previewing survey questions before distributing them —  and discussing what various potential responses may mean for the business — can go a long way toward strengthening response rates and the integrity of the results. Families can come together with their advisors for a panel discussion on each question. The financial advisor can talk about the “return on equity” questions; the independent board director can address the “succession and corporate culture” questions; and the accountant and estate attorney can address the tax landscape on the “selling the business” questions.

Family members are more likely to engage when they see the direct connection between their input and tangible outcomes. Clearly communicating the purpose of each survey and how the feedback will influence decisions within the family enterprise is crucial. When shareholders understand that their contributions can lead to meaningful changes or actions, they are more inclined to actively participate. It's also important to follow up by sharing the results and demonstrating how their input was used, reinforcing the value of their engagement and fostering a sense of ownership in the process. This transparency not only encourages ongoing participation but also builds trust and accountability within the family.

Achieving Alignment

Not everyone feels comfortable or empowered to speak up, especially in shareholder groups where diverse or opposing views are common and the loudest voices often dominate the conversation. It's crucial to create an environment where all shareholders feel safe to express their opinions. Ensuring that feedback can be kept confidential is one way to encourage participation from those who might be hesitant to speak out. Additionally, it's important to emphasize that not everyone needs to weigh in on every topic, allowing for more focused and meaningful contributions. Creating a space for the quieter voices to be represented and heard can significantly impact decision-making, helping to capture a fuller range of perspectives and ultimately leading to more balanced and inclusive outcomes.

Effectively gathering and responding to shareholder sentiment is key to sustaining alignment, trust and engagement within a multigenerational family enterprise. By implementing both formal and informal communication methods and creating a space where all voices are heard, the board and management can act with confidence, knowing they are aligned with shareholder wishes. This alignment empowers the family to navigate challenges and seize opportunities with unity and clarity.

About the Author(s)

Peter Begalla

Peter Begalla is Family Business Magazine's conference chairman and an adviser to business families.


Torri Hawley

Torri Hawley is the Director of Learning Experience for Tamarind Learning, bringing a decade of experience working with enterprising families. A seventh-generation family business member and board member, she is passionate about empowering next-generation members through education and governance.


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