Shareholder Model
Philosophy: "The social responsibility of business is to increase its [blank]".
What is Profits?
This philosophy views the company as a "Social Institution" balancing many needs.
What is Continental European?
Mexico's hybrid system blends voluntary codes with mandates to move from a founder’s business to this.
What is An Institution?
Its role is to align the family around shared values and resolve conflicts like succession.
What is Family Council?
This type of succession is about who will inherit the shares.
What is Ownership Succession?
This US law makes CEOs personally liable for financial lies following the Enron scandal.
What is Sarbanes-Oxley Act (SOX)?
Famous German part: the legal right of workers to participate in the management of their company.
What is Codetermination?
The "European" side of the hybrid uses this logic: if you don't follow a rule, you must say why.
What is Comply or Explain?
This written document describes policies and vision regulating family members' relationship with the business.
What is Family Constitution?
This framework clarifies the groups: Family, Ownership, and Business.
What is Three-Circle Model?
The USA uses this "Single-Tier" board structure where executives and outsiders sit together.
What is Unitary Board?
In Germany, this board tier hires, fires, and oversees managers.
What is Supervisory Board (Aufsichtsrat)?
The "US" side of the hybrid requires public companies to have at least this percentage of Independent Directors.
What is 25%?
This is the point in growth (often 2nd generation) where it is recommended to formalize a Council.
What is Complexity?
Character, Capability, Commitment, and Connection (The Four Cs) are used to evaluate this.
What is A Successor?
To align interests, a large portion of a CEO's pay includes these rights to buy stock.
What is Stock Options?
Historically, European companies get money from these institutions which then sit on their boards.
What is Large Banks?
Mexico uses these to manage the overlap between the business and the family bloodline.
What is Family Protocols / Constitutions?
These are the three common sub-committees: Education, Social, and _________________.
What is Governance?
This "ultimate safety valve" handles when a family member wants to sell their interest.
What is Buy-Sell Agreement?
If a stock price is too low, another company can buy the majority of shares and replace management.
What is Hostile Takeover?
The goal of this model is for managers to focus on this, rather than quarterly "theatrical" profits.
What is Long-term Stability?
This is the engine for moving a family business to a professional process for the next leader.
What is Institutionalization?
This supports goals by consolidating financial reporting of all family assets.
What is Family Office?
This occurs when a retiring founder has difficulty "letting go" during a transition.
What is Sticky Baton Syndrome?