Is the next decade going to be the age when women take on even more significant and prominent roles in family businesses?
Reports on family businesses suggest that almost 1 in 4 of the top management positions in such companies are now held by women. This is almost double that of the world’s largest non-family companies.
An Ernst & Young report in 2014 found that 22% of the top management teams in family businesses consist of women and these companies on average have about 5 women in C-suite positions.
A more striking figure is that 30% of these family businesses say they are strongly considering a woman as their next CEO while the remaining 70% say they are considering it.
Great strides have been made in leveling the playing field when it comes to gender equality in the workforce. And even in big family businesses, we are starting to see that many heads of the family are more receptive to their daughters taking over the family business.
For example, it used to be that older clients would insist on a son taking over the business, even if he was not interested to take over or has little business acumen. Often, a more qualified or interested daughter would be ignored.
However, nowadays, when it comes to deciding on a successor, we see more of our clients paying more attention to factors such as the child’s interest, capabilities, business acumen and character, rather than just their gender.
Families are also beginning to think of their capital in a larger sense of the word, so that it covers not just financial but also intellectual and social capital.
While there is still some bias towards sons when it comes to financial capital, there is now more equal distribution of capital to other female family members. More Asian families are starting to have their social and intellectual capital advised by or addressed by women.
For example, a family that is into philanthropy usually has a woman in charge of that. A family that is actively involved in helping society is more well regarded by society. The overall financial gains from this goodwill is more long term than purely transactional.
Why else do women seem to thrive more in family businesses than non-family ones? Here are some possibilities.
1. Taking a long-term view
Most family businesses seek to preserve the business in order to build a legacy for future generations.
As such, they prioritise long-term sustainability and growth over quick but ultimately short-term gains.
In general, a company culture which values sustained growth suits women leaders better as they tend to take a longer-term view on things.
Studies also find that women approach succession in a manner which places greater emphasis on the company’s longevity over individual interests.
2. An inclusive environment
The other major difference with family businesses is that they focus not only on making profits, but more on the people and relationships within both the family and the company.
It is not just a business, but a way of life almost, where everyone in the company values building relationships and inclusivity.
The bigger purpose of a family business thus helps to keep family members and even employees engage more with each other within the company.
As the lines between work and family life are often blurred in a family business, such companies are often more supportive of employees having an appropriate work-life balance.
Again, building a more conducive work environment is something that women excel at better than most men, who are typically more results driven.
3. It’s also about values
We have seen more daughters being given an active role in formulating the family constitution and sitting on the family council.
Both the constitution and council set the tone for what the family stands for and the values it espouses and are vital pieces of a family office. They set the framework for which future generations can refer to when making decisions involving the family or its business.
As the business side of things have to align with the family’s values enshrined in the constitution, the importance of the women’s role in the constitution and council cannot be understated.
Women also do better with transmitting values to the next generation of leaders, making them ideal to hold influential positions within the company.Disclaimer applicable to recommendation
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