The “Golden Goose” Test
Employment Yes No
Entry into the business is based on company
(not personal) need.
Standards and requirements for employment
(education, skills, experience, hours, etc.)
are evenly applied and enforced.
Family members are promoted on the basis
of competence and position availability.
Family members are held accountable through
regular performance reviews.
There are clear and appropriate sanctions for
Compensation Yes No
Family members receive compensation and
benefits based on being an employee – not
on ownership position.
Family employees are paid “fair market value”
for their positions (salary, bonuses, perks,
benefits, allowances, etc.)
Compensation is based on performance – not
Owners are compensated onlythrough return
Family members adopt lifestyles commensurate
with income from employment.
Ownership Yes No
Family members buy into the business through
“sweat equity,” stock purchase or both.
Inheritance is differentiated from receiving
ownership shares in the business.
Buy-sell agreements provide for liquidity needs
Tax-advantaged estate planning places no undue
burden on the business or its management.
Only owners who are in management positions
make operational decisions for the business.
Board of Directors Yes No
The Board is active and meets regularly.
“Outsiders” are in the majority.
Members have term limits.
“Outsiders” nominate new members.
The Board evaluates its own effectiveness.
Family Yes No
The family has a life and identity apart from
The family gets together regularly without
The family has ways outside the business
to support disadvantaged members.
There are explicit mechanisms for handling
disagreements and resolving conflict.
The family celebrates its wins and has fun together.
How to determine the health of your
family’s “golden goose”
* Five eggs: a fat and happy goose
* Four eggs: an adequate goose
* Three eggs: a marginal goose
* Two eggs: a very poor goose
* One egg: a goose on its way out