Harvard Business Review Family Business Handbook

5.

Value

Create an Owner Strategy to Define Your Success

“What do you mean we can’t pay dividends this year?” Leigh was incredulous. The board of the surfing brand company she and her sisters Sarah and Sharon had founded had just reviewed projected end-of-year performance. This meeting usually celebrated another incremental step forward, with moderate growth, no debt, and significant dividends, which Leigh, Sarah, and Sharon used to support their comfortable lifestyle and charitable donations. This year, however, revenue growth was way up, but profits were down, and Leigh learned that the covenants on the debt taken out by the company to achieve that growth did not allow for any dividends. For the first time, Leigh felt out of control of the ...