An inclusive ownership policy helps preserve a family's legacy




“Defining roles of managers and owners,” by Charlotte Lamp, Family Business Magazine, March/April 2014

When ownership of a family business is limited to family employees or family managers, the other family members are cut off from the business and from the family legacy. These non-employee family members lose not only their connection to the family business, but also their connection to the family story. Research into family business best practices has shown that there is a better way — a way to enable the business to be professionalized ant the family to stay together.

The employee/manager role should be limited to those qualified in management. The owner role should be inclusive of all family members in order to maintain the legacy.

In a family business, ownership most often occurs through inheritance because the shares are not openly traded. Compensation for being an investor comes through distributions of some of the company’s profits and through increased share value from the company’s growth and retained earnings. For a family investor, growing and developing into a responsible owner of the family’s business requires education about financial matters, about the business and about the family legacy. Responsible owners should be held accountable for their role as investors in the family business.

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