Supportive ownership: A case study

Sara grew up knowing that her family owned a consumer products company. Her mom pointed it out to her when they saw their products in a store. Sara stored her jewelry in the company’s 100 anniversary commemorative box. But her family lived far away from the company headquarters, they didn’t visit much, her mom rarely spoke with her cousins, and Sara did not know much about the company or how it had evolved over the decades. Her mom sometimes attended the annual shareholders meeting, but didn’t talk to Sara about it. Every once in a while, her mom would make a remark that, “thanks to the company,” they got to do things like take a special vacation.

Sara progressed through school, was a bright pre-med student, and later a pediatrician. She married, and grew her practice and her family. She kept her commemorative jewelry box on the shelf.

Unexpectedly, her parents passed away in their early 60’s and Sara found herself inheriting her mom’s stake in the family business. Sara was touched when a number of family members made the long trip to attend the funeral, and others called with condolences. A few months later, one of her mom’s cousins who described himself as the Chair of the Owners Council called her to discuss her ownership.

In January, she cleared her calendar of patients for a couple days so she could attend her first Annual Shareholders meeting. She received in advance a packet of financial statements and industry reports, as well as a list of board members to re-instate; she did not know most of the names. She did her best to make her way through the documents prior to the meeting. It seemed that the company was doing well but the industry was changing and there were potential risks ahead.

As she prepared for the meeting, Sara was uncertain. Her background was medicine, not business. What was she supposed to do (or not do) now that she was an owner? What would this investment yield in 5-10 years’ time? How would that factor into her lifestyle or fit with the investment portfolio that she and her husband were building with their income? Who were the second and third cousins she would be meeting, most of whom for the first time? What were people expecting of her? Did she have anything to contribute to her family business? 

Sara went online to see how she could make sense of a financial statement. She could follow the rows of numbers, but what was the underlying story they were telling? She found a 6-week, in-person, finance bootcamp on Saturday mornings at a nearby university, but she couldn’t devote that kind of time. 

The next result was more appealing: a well-rated, self-paced, online course on “Understanding Financial Statements.” She decided to give it a go and spent an evening or two a week making her way through the material. From there, she followed her own interest and sampled some other free online courses related to consumer products, manufacturing, marketing, and psychology for business leaders.

Sara also researched the board members who were up for re-election, reading their backgrounds online.

Sara brought her husband and kids with her to the shareholder meeting, because it was a one-day meeting followed by a family weekend. She thought it would be a good opportunity to reengage with her mother’s family.

At the meeting, the family offered Sara condolences and a warm welcome. The family chairman of the board opened the meeting with an overview of the year, including the company’s overall performance, the story of a recent acquisition, and some high-level stats on how the company was growing. Then the CFO presented on the company’s YTD performance.

Sara recognized a number of concepts that were covered in her online courses and was pleased with her ability to follow along fairly easily. The board members who were up for re-election gave a short talk about their views on the company and board service, and then the owners held an election, in which Sara voted. 

During another session, someone in the family shared that they were launching a task force to explore family governance as a way to help the family stay united and get organized, now that they had grown to the 5th generation of ownership with over 100 family members, spread around the world. 

Sara let her cousin know that she was interested in volunteering, and before she knew it, she was seated on the task force, which became a family council. Her schedule was full, but she managed to make time for Zoom meetings and two in-person meetings a year. It served as a crash course in family dynamics and family history, and was a great way to get to know the family and the company. 

The family council started a quarterly newsletter and organized family meetings, trainings on ownership literacy with guest speakers, and also fun family weekends that allowed Sara to learn and also bond with her family. She learned how proud her family was to own this company, and how much sacrifice and effort it took to keep it going. She talked to her kids about the business more than her mom ever talked to her about it. Her kids subscribed to the family newsletter.

Over the next couple of years, Sara continued to make an effort to build her knowledge. She learned about business, leadership, and her family. She dusted off the family history book written by her aunt that had long sat on the shelf, and read it with her kids. She was surprised to learn that her grandparents had funded the first public health clinic in their town, and that workforce health and wellness had been a core value of the company for decades. 

When her local hospital sent an email asking for people in the community to participate in a long-term visioning exercise, she said yes. Ordinarily she would never participate in something like that, but the family council was going to start a family visioning exercise soon and she learned some interesting ideas at the hospital that she was able to suggest at the next task force meeting. 

She attended a charity gala that her family’s philanthropic foundation hosted, and admired one of her cousins who effortlessly networked and gave the opening speech for the family. Sara had always been more introverted, but was inspired to hire a public speaking coach. She used what she learned to help her speak up in work meetings and also when sharing the “elevator pitch” of what her family company did when people asked her at cocktail parties.

It wasn’t long before some of her younger cousins started to approach her with questions like, “What did you take from the CEO’s presentation?” and “How do you know what questions to ask at the shareholder meeting?” She told them about the things she had done to become a supportive owner. 

Now, the family is building out a more formal development program to prepare all new owners in a more systematic way. They’ve developed a policy and a fund where next generation family members can apply for reimbursement for taking courses on family business. Sara is proud that the program includes some of her suggestions.

Today, Sara stays up to date by using a “Google alert” that sends her news stories about the company. She reads a monthly industry newsletter recommended by the CEO. She reads the quarterly family newsletter and the annual financial report. 

As often as she can, she attends yearly workshops put on by her family on topics like “How to resolve conflict and disagree respectfully” that have helped her with family members and with colleagues and patients at work. She serves as a mentor to younger family members with an interest in medicine. She is excited for the upcoming shareholder meeting where they will discuss the acquisition of a new e-commerce platform. 

Sara is happy and surprised by the richness that her reengagement as a family owner has brought to her and her children’s lives, and looks forward to the years ahead.