When it comes to women’s role on boards, it seems family businesses are showing the way.
According to US research by Deloitte, Perspectives on family-owned businesses – Governance and succession planning, one in 10 (11 per cent) of family business boards are comprised of 41-50 per cent women and 16 per cent have 31-40 per cent.
That’s low, but it’s a damn sight better than the figures for the corporate world. According to the latest figures from the Australian Institute of Company Directors, the latest percentage of women on ASX 200 boards is 18.6 per cent. While this is a significant increase, corporations still have a long way to go.
Not so for family businesses, say specialists. While statistics showing the number of family business boards are not yet available, the anecdotal evidence suggests there are more women directors of family businesses and more working in family offices.
Elise Elliott, a partner at Deloitte Private, says that while statistics aren’t available, there is enough anecdotal evidence, and certainly she sees it with her clients, to show there are more women on family boards than there are in the corporate world. It’s still low, she says, but higher.
“The reason a family has a board is to implement a proper governance structure and to really separate the operational strategic issues from family issues, and women certainly have a role to play there,’’ Ms Elliott says. “The other types of boards are the executive boards that are running businesses and you would only have a role to play there if you’re involved in the business. So I guess from a female perspective I would see more of those females on the family board level that are perhaps not involved in the running of the business.
“They are really there to have an oversight of the family’s assets, because eventually they will be the successors of those assets. Really they are there from an education, mentoring, communication, and transparency point of view.”
That said, women in family businesses would face the same issues as their counterparts in the corporate world. They would be taking time off to raise children. But unlike the corporate world, the family business always has the door open. “Hopefully later there is a better chance for females to come back in and be supported in that role, which is why I think there are more females on [family] boards than there are in the corporate world,” she says.
Susanne Moore, the founder and executive chair of the Centre for Gender Economics and Innovation, says family businesses are more inclined to recognise the changes that have transformed society.
“In family offices, a lot of young women are taking over,’’ Ms Moore says. “We have more women being educated than ever before and, in some cases, there are greater numbers of women graduating -- and that’s certainly in Australia and the US -- than we have young men. Because of the social changes there is more willingness by families to recognise the contribution of women where there is a lot of family wealth over the generations. Because these women are more educated, they are more able to make an impact and participate in the running of the business.”
She says this is the big change now for family businesses.
“If you look, even 30 years ago, you didn’t see it as much,’’ she says. “At least there is more willingness to consider putting a female on the board of a family company than there ever was before.”
She says many of the women are steering family businesses in new directions. For example, there is more focus now on philanthropy.
“They are very conspicuous when it comes to social impact investing and changing the world,’’ she says. “One of the good things is this desire to do some philanthropy and social impact investing and create social enterprises. And some of that is being driven by women.”
Ms Moore says men are involved in philanthropy, too. But the presence of women on family business boards creates more opportunities. “Generally speaking, diversity gives you another way of thinking. In general, any sort of diversity or difference will open up innovations and other ways of looking at things,” she says.
Steven McDonald, the investment director and co-founder of Infinitas, says he too has noticed more women on family business boards. He says they bring a different perspective,
“It’s not so much the gender of the person but the different perspectives that the board members bring,” Mr McDonald says.
“It happens to be the case that women as a group bring a different perspective than men, and by bringing more perspectives on a situation problems are more likely to be identified and solutions are more likely to be identified.
“The culture of the business changes, and there is a more inclusive feel to it. It’s likely that creativity will be encouraged. It’s also more likely that social responsibility will be considered.
“And the business will take on a greater sense of its place in the world, that business isn’t just about profit maximisation but about the relationships that business develops.”
Mr McDonald says the role of the women often comes down to looking after the family’s legacy.
“If they have set up a charitable foundation, it’s often the women who are given the responsibility for looking after the family’s philanthropy rather than management of the family wealth. That’s through cultural factors rather than financial than factors.”
Ms Elliott says women on boards are also more inclined to be concerned with handling the family legacy, which is critical.
“They are there to make sure the values are passed and being that glue for the family to stay together,” she says.
“In the families I deal with, the mother or the matriarch is really the true spiritual leader of the family because she knows exactly what’s going on and all the little intricacies and dynamics amongst family members. She is usually very switched on and a very important part of that whole family board.”
Women are also more likely to be focused on succession planning, philanthropy and the family office.
“The female, especially if she is not involved in the business, would want to make sure her kids have the same opportunities as say her siblings’ kids, whose parents might be involved in the business,” she says.
“I find that mostly the females in families look after the family foundation and the philanthropy side of things, and you will see a lot of females in family businesses either looking after that philanthropic arm or even looking after the family office.”