Want to understand your shareholder group? Ask them!
In our work with fiduciary and advisory boards of multigenerational family enterprises, one situation arises with surprising frequency when we ask independent directors whether they understand the values and objectives of the shareholder group. Typically, this question is followed by silence. Some directors reply cautiously, “The family is quite diverse—there’s no single set of values or goals.” Others are more direct, “I really only know the family members who sit on the board. I assume they speak for the rest.”
This, obviously, wouldn’t fly in a public firm: Directors are expected to understand the priorities of major shareholders—not just their financial expectations, but also their non-financial objectives. So why would it be acceptable for directors of private companies to remain in the dark? It clearly isn’t a lack of competence, it’s likely that most private companies have no formal mechanism for surfacing shareholder perspectives, particularly when the ownership group extends beyond the boardroom and includes multiple branches and generations. This creates a disconnect; directors are asked to serve the shareholder group, but may only have access to a narrow slice of its perspectives , or are wary of asking for access to a larger group.
And that is just one case. Many enterprising families we work with, for example in the context of setting up or rejuvenating a family council or supporting them in developing family policies, realize that they don’t have a clear understanding of the diverse values and goals across the many branches and generations of their shareholder group. Once they recognize this gap, they often end up deciding to survey and interview their shareholder group to better understand not only the diversity of values, goals, and expectations within the shareholder group, but also the varying level of commitment to the family and the enterprise. These efforts, typically a combination of survey and interview methodology, usually yield not just surprising, but catalytic results.
The board context is just one important example. Many of the enterprising families, whether establishing a new family council, revitalizing an existing one, or crafting governance policies—come to a similar realization: despite good intentions, they lack a clear and current understanding of the full range of values and goals across their shareholder group. Especially in families with multiple branches and generations, this gap can quietly undermine cohesion and decision-making. Even when they have asked, generations of family dynamics can create apathy and distrust that leads to incomplete participation which can be overcome, at least in part, by using third parties to collect and analyze information.
Families seeking better knowledge choose to undertake a structured process—typically a combination of survey and in-depth interviews—to better understand not only the diversity of perspectives, but also the varying degrees of connection and commitment to the enterprise and to the family itself. These efforts deliver more than just useful insights. They often spark catalytic conversations and actions—not just reframing assumptions and surfacing shared aspirations, but also deciding on tangible measure to spark engagement, and nurture cohesion within the shareholder group.
Are you thinking that learning more about where your shareholder group stands in terms of their knowledge of or commitment to the family enterprise, their personal values and objectives, and concerns and expectations vis-à-vis the family enterprise? Here are a few (we think) excellent reasons to learn more about your family shareholders.
1. Understand differences among your shareholders
Family businesses often think they know their shareholders, “after all, they’re family.” But a well-designed survey and a series of individual or group interviews can uncover deeper layers: differences in risk appetite, levels of financial dependency on the business, or emotional connection to the enterprise. In one family we know, shareholder groups emerged not along generational lines, but based on how dependent individuals were on dividend income and how concentrated their personal wealth was in company shares. These insights helped management move beyond assumptions and engage shareholders in more meaningful, tailored ways.
2. Move from guesswork to certainty
Without structured input, boards generally rely on vague financial goals. Surveys bring clarity. Do your family shareholders want greater liquidity? Are they willing to accept smaller distributions in favor of long-term reinvestment and value growth? What role does legacy play in their vision of success? This is not about handing decision-making power to shareholders or abdicating fiduciary duty—it’s about making more informed decisions by understanding the people those decisions ultimately impact. In the context of family governance, understanding how many of your shareholders are deeply committed, disenfranchised, or somewhere in-between is crucial: It means understanding what it might take to move those in the middle, or on the disenfranchised part of the spectrum towards more commitment. It can help when designing a roadmap for shareholder education and engagement.
3. Educate and Engage Shareholders in the Process
Surveys and interviews aren’t a one-way street. They provide a valuable opportunity to educate shareholders—especially those outside the day-to-day business—on the key decisions facing the company. With the right framing, these tools can introduce concepts like compensation or distribution policy, building a more informed and engaged shareholder base. We’ve found that even a brief educational session prior to these efforts can significantly elevate the quality and thoughtfulness of responses.
4. Give Voice to the Quiet Majority
In many families, a few vocal shareholders dominate conversations. But being outspoken doesn’t necessarily mean being representative. A confidential survey offers a channel for all shareholders to be heard—including those who are less comfortable speaking up in group settings. It ensures that the board and management are working from a complete picture, not just the loudest parts of it. For maximum honesty (and usefulness), we often recommend an anonymous survey conducted by a neutral third party.
Periodic shareholder survey or interviews won’t solve all your governance challenges—but they will provide a stronger foundation. Having clarity about shareholder values, goals, intentions, and concerns could help you shift decision-making from assumption to understanding, from top-down directives to inclusion, leading to more shareholder engagement and unity along the way.
