Family Wealth Continuity Webinar SeriesShared Family Capital Strategy: A Holistic View

Session 1August 18th 2020

Hosted by: Jennifer Pendergast

German HerreraJonathan Flack

Technical Difficulties or General Questions

• If you are experiencing technical difficulties, please reach out to Shree Rajadurai (our Virtual Conference Moderator) through the Q& A function.

Rules of Engagement

• All participants are muted during the session

• Please submit questions in the Q&A box. Questions will be answered at the end of the presentation

Speakers

German HerreraFamily Business AdvisoryPractice Global Co-leader

Egon Zehnder

Jennifer PendergastJohn L. Ward Clinical Professor

of Family Enterprise and Executive Director of the John

L. Ward Center for Family Enterprises

Jonathan FlackFamily Enterprises and

Business LeaderPwC US

How we began to think about Shared Family CapitalAt the Broadest Portfolio Level:

Shared Family Capital

GIVING AND SPENDING

STABILITY AND PRESERVATION

GROWTH

What shared assets do you have in your family enterprise?

How complex Shared Family Capital actually is…At the Broadest Portfolio Level:

Shared Family Capital

Who has the broadest view of your shared family assets?

• Applying the Shared Family Capital Framework• Developing your Shared Family Capital Policy• Assessing and aligning capital to your policy

Session 2

• Designing a governance and operating model• Systems for reporting and measuring

Session 3

• Implementation and live group exercisesSession 4

Program Overview

• Series overview, objectives• Vision & purpose• Introduction to the Shared Family Capital Framework

Session 1

Shared Family Capital Strategy: A Holistic View

The Role of Purpose in the Enterprising Family

Elements of purpose• Collective contribution • Unique and meaningful• Authentic and relevant• Intention and action

Purpose examples • Economic engine• Source of pride and

legacy

What is Family Enterprise Purpose?

Individual vs. Collective Purpose

Leveraging Purpose in the Family Enterprise

• Must be grounded in individual purpose• Process is about uncovering not creating

• Engages individuals• Guides decision making• Supports generational transition• Aligns diverse interests

Is your family purpose holistically defined across your shared assets?

Shared Family Capital Framework

Operating Company• Organic growth• Acquisitions / Inorganic growth• Diversification of core business• Reducing debt• Business Optimization

Financial Investments & Liquid Assets• Family Office• Family / shared investment strategies

(marketable securities, PE, Hedge Funds, other direct investments, passion assets, etc.)

GROWTH (THE ROOTS)

Financial Investments & Liquid Assets• Lower risk investments• Foundation (asset management)• Dividends• Passion assets (art, unique properties, etc.)• Buying out / share repurchase (providing liquidity)• Estate and tax planning

Operating Company• Capital requirements• Reserve requirements

STABILITY AND PRESERVATION (THE TRUNK)

Financial Investments & Liquid Assets• Philanthropic gifting and grant-making• Education Fund• Family trips, conferences, reunions• Funding entrepreneurial ventures (non-shared)• Medical emergency funds• Family Lifestyle assets (planes, boats, jewelry, etc.)• Tax payments

Operating Company• Corporate Philanthropy• Community investment

GIVING AND SPENDING (THE APPLES)

Shared Family Capital

Vision and Purpose

Investment Deployment

• Applying the Shared Family Capital Framework• Developing your Shared Family Capital Policy• Assessing and aligning capital to your policy

Sept. 232020 2

• Designing a governance and operating model• Systems for reporting and measuring

Oct.2020 3

• Implementation and live group exercisesNov.2020 4

Next time…

• Series overview, objectives• Vision & purpose• Introduction to the Shared Family Capital Framework

Aug .182020 1

Shared Family Capital Strategy: A Holistic View

Session

Session

Session

Session

Takeaway questions for Session TwoSeptember 23rd 2020

• Have you applied your family’s purpose across your shared family capital? Is this purpose your guide?

• Think through what is included in your shared family capital and where it sits (using the framework as the guideline).

• What is the family’s visibility into the shared family capital? Do you do a good job of making people aware of what this is and isn’t?