Still, you just don't turn over the company to the next generation without making sure they understand the business and have been properly trained, he added. The quality of management, Jonovic said, is the bedrock of shareholder value. An outside board along with professional advisors can offer the kind of help and expertise needed to develop an ongoing, formalized process of performance evaluation, proper compensation procedures and effective motivation to professionalize the business and increase shareholder value. They can also explore options, such as phantom stocks which offer ownership-like rewards. Minority ownership when properly structured, he said, has many benefits.
Communication is the key.
You need to eliminate misunderstandings, manage the diverse views so that the business may benefit from the vast richness of opinions, participants were told. People who see themselves as a part of it will pull together during down times to turn things around, according to Jonovic. Asked if there wasn't a risk in revealing too much to outsiders. There's always a risk, Jonovic replied, but the benefits far outweigh any risks. He also urged owners to let the upcoming generation assume responsibility, initiate and oversee projects.