Return on investment
The Types of Owners in a family enterprise will drive the policy on return on investment. An Investing owner would expect at least a market rate of return while owners who are Creating, Managing or Governing an enterprise are far more likely to attribute importance to value outcomes that are not based on financial reward. For example, they would likely trade off short term financial returns against the opportunity to create, preserve or extend a legacy of family ownership and to secure benefits ranging from personal fulfilment to creating opportunities for the wider family to enjoy financial security and remain connected.
These considerations explain the vastly different polices on Return on investment adopted by family enterprises. The challenge is to articulate the assumptions on which a policy is based so that it is clear to everyone who is affected by it. Over time if the Intention of the controlling family changes, the Return on investment policy will have to be adapted.
