Problem: Family Business Management
(Word Limit: 3000 words)
A. State the criterion to select an independent director. Discuss the various CVs that such suitable candidates can have.
B. Comment on the importance of a mission statement in the charters of a family business? Create a mission statement for a fictitious family business and comment on the intended effect of each marginal component. Be mindful to include an element in the context of family businesses.
C. Why is divorce considered the number one enemy for family businesses? What steps can be taken to mitigate or avoid the effect of a partner's divorce on the running of the business?
D. Discuss the disadvantages of Overpaying a family employee?
E. Explain phantom-equity incentives. What are the various vesting conditions that can be attached to an equity incentive?
F. List the various ways in which family-owned business can be sold. Include the key characteristics of each process.