Is it wise for a company to have a dividend distribution policy that is available to shareholders.

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Anonymous
 (CFO) | Jan 19, 2012

We are a LLC and a publicly reporting company, but our shares are not listed on the stock exchange. Some board members want a published distribution guidelines policy that is available to shareholders. I feel that is risky.

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Proformative Advisor
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Regis Quirin
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Title: Chief Financial Officer Consultant
Company: CMD Capital Formation LLC
 (Chief Financial Officer Consultant at CMD Capital Formation LLC) | May 2, 2012

Very risky. You should always have a policy available for the board to have and refer to. However, publishing a policy opens you up to issues which include - shareholders debating the policy; shareholders jumping on you if you do not follow the policy; competitors reviewing your approach.

I am all for internal transparency, but external transparency if not required by regulations, is an un-necessary risk.

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