But when the firm pays substantial amounts of money to, for example, an interior-design firm run by the CEO’s wife or to a law firm in which the CFO’s son-in-law is a partner, I sit up and take notice. The key here is to make sure that (1) the firm isn’t sending a great amount of business in the direction of related parties and (2) there’s not an egregious pattern of abuse. One or two small related-party transactions aren’t a big deal, but they do cause me to raise an eyebrow because they may be signs of a deeper problem.
