Family businesses lead the way on the road to gender equality
It’s no secret that women are underrepresented in business leadership positions. The Fortune 500 has just 32 female CEOs, while in Australia just 9 women lead companies in the ASX 200.
However, there is one sector bucking this trend. Family businesses don’t appear to have a glass ceiling.
An EY survey of some of the largest family businesses in the world found that family controlled businesses have far higher representation by women in the c-suit, in senior management and in the boardroom. And, 70 percent of family businesses stated that they were considering appointing a woman as their next CEO.1
It’s probably no coincidence that family businesses are recognized for their contribution to economic stability and job creation. The same EY survey found that family businesses create as much as 70 to 90 percent of global GDP, and create as many as 80% of jobs in some countries. Research also suggests that an organization with management made up of at least 30 percent women can increase its margin by as much 6 percent. 2
But there is another way in which family businesses differ from the large corporates that make up the ASX 200 and the Fortune 500. These businesses are more concerned with long term stability and sustainable value creation, than with short term profits.
One of the reasons for the differing patterns in gender equality may have to do with the different objectives corporates and family businesses have. While corporates are often focused on creating short term returns for shareholders, family businesses are more concerned with long term stability and value creation. A family will be more concerned with having a business to pass on to the next generation than with meeting quarterly profit targets.
There are other benefits to having gender diversity within the leadership of a company. In many cases a diverse leadership team will be more representative of the customer base, while having a wider range of viewpoints to draw upon. Building a reputation as a company without a glass ceiling can also reduce turnover, as women are not discouraged. This also broadens the size of the potential talent pool for new hires.
So, the improved gender diversity is not just a case of female heirs taking over family businesses, but rather a different attitude to leadership within these businesses. Family businesses are clearly benefitting from this inclusive approach to leadership – and for female professionals in these businesses, it means the sky’s the limit.
Your Action List for Women in Family Business3
- Do you have clearly defined and written SMART goals?
- On a scale of 1-10 how passionate are you about your family business and why?
- Consider a mentor or role model. What value could they add?
- Are you open-minded to change and ready to innovate?
- Do you know your family business history?
- Do you have family business specific education?
For you and your family business
- Does your family group have a clear shared long-term vision?
- Do you have formal structures and processes for both family and business?
- Have you taken the time to document some family and business policies?
- Do you have a trusted family business adviser?
- Does your family group have family meetings?