Aligning goals of stakeholders in the family firm

Shareholders in family companies frequently come into conflict as the company grows, the shareholder mix changes, generations succeed each other, outside investors appear and non-family professional managers are hired. The biggest divergence of interest develops between shareholders who actively participate in the management of the company (“insiders”) and those who do not (“outsiders”). These groups tend to become misaligned in terms of their personal financial goals and their priorities for company operations, dividends and distributions, long-term corporate goals, governance and control.

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