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Whom Should Shareholders Ask?

Dear Advisor:

When we have questions as shareholders, who in the business should we contact to get answers?
 



Like most questions about family business, the answer is “it depends.”  It depends on what your question is about.  Generally speaking, if your question deals with governance, the functioning of the board or shareholder issues, talk to the chairman of the board.  When questions deal with the strategy or the performance of the company, talk to the chief executive officer.  When the focus is on financial matters like questions concerning financial reporting (profit or loss statements, balance sheets, cash flow reports) or about dividends/distributions, ask the chief financial officer.  And if you have questions about career or employment opportunities in the family business or about issues related to personnel development, ask the company’s human resources manager.

In smaller businesses, one person may hold more than one of these positions.  Before asking a question it is worth knowing whether the individual to whom it is directed feels enabled to answer it.  Few things are more uncomfortable to a non-family executive than to feel “caught between” owners.  When in doubt about who to ask, start at the top of the corporate ladder.  Never parachute into the company shooting questions at employees at various levels.  The organization’s chain of command should not be disrupted by shareholders either with questions or demands.

Craig Aronoff
 

 

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