Attitudes and expectations of shareholders: The case of the multi-generation family business

As family shareholder support is essential for the ongoing viability of the business as a family business, multi-generation family businesses which allow ‘the ownership tree’ to grow need to monitor the attitudes and expectations of the expanding number of family member shareholders. This paper reports on a case study of a multi-generation family business where the shareholder group had grown to 50 individual shareholders. The study explored the shareholders' views about the business and particularly their attitudes to stewardship and whether and under what circumstances, they would hold their shareholdings, pass them to the next generation of family or possibly consider relinquishing their holdings. Data was obtained from a semi-structured questionnaire and follow-up interviews. While respondents indicated that they had immense pride in being a shareholder of the family business, they admitted that their knowledge of that business was less than optimal. Financial returns were viewed as important, but the intangible rewards relating to the heritage of forebears were more so. While they were keen to pass on their shares to their children, they were uncertain about the level of commitment the next generation members would have. Lessons from this case study are discussed for other multi-generation family businesses focusing on shareholders' responsibilities as owners and the board's need to ensure timely transfer of knowledge to the wider shareholder group.