When to prune your family tree




From “Should you prune your family tree?,” by Jayne A. Pearl, Family Business, Spring 2010

Is it time to curtail the complexity of your family business ownership structure by reducing the number of family shareholders? It may be time to consider such a move:

  • If you see family members who are not interested or are incompetent.
  • If you have very capable and highly motivated non-family employees.
  • If family members are competing to become successors and future conflict is a real possibility.
  • If owners’ visions diverge.
  • If your board includes family members who are involved in the business but are not playing a key role.
  • If inactive owners feel they’re uninformed or taken advantage of, or if they believe active owners are overpaying themselves or non-family members.
  • If family members’ life cycles don’t match up.

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