Men are still dominating family business

Data shows women are being overlooked as potential family business leaders. Is it outdated family traditions holding them back or broader business trends?

Family businesses largely remain no-go zones for women. Females are struggling to break into the leadership of family owned firms. Studies show that the number of women running family businesses has not increased.

A KPMG Family Business Australia survey found that only 14 per cent of family businesses had a female chief executive officer. It found that about 82 per cent had male family members as owner managers versus around 16 per cent of females. In more than 81 per cent of cases, the chairman of the board was a male family member compared to about 12 per cent for females. With management teams, close to 48 per cent were male family members, more than twice as many as the 21 per cent of family females in the management team.

There are similar results in other studies. A 2010 study by accounting firm MGI and RMIT found that daughters were only involved in 7.1 per cent of businesses and sisters involved in just 2 per cent. Their chances of succession weren’t that good either – family business owners said that sons would succeed them in 27.4 per cent of cases, while daughters would take over in just 5.3 per cent of cases.

Of course, there are exceptions to these trends, like for example Sussan Group chief executive Naomi Milgrom, Eliza Brown at Brown Brothers, Pippa Hallas at Ella Bache, Imelda Roche from the Roche family, Victoria McClurg at Barossa Valley Cheese, Prue Henschke from C A Henschke & Co, producers of the famous Henschke wines, and Jan Taylor from Tasmanian ship building company Taylor Bros (A ship that’s Taylor made, Feb 7).

But family business remains pretty much in the hands of men.

There are several explanations why this might be the case. Part of it could be just a reflection of the general business scene. The 2012 Census of Australian Women In Leadership survey released by the Equal Opportunity for Women in the Workplace Agency revealed that women comprise just 9.2 per cent of executives in the ASX 500, that only 12 ASX 500 companies have female CEOs, and women hold 12.3 per cent of directorships in the ASX 200 but only 9.2 per cent in the ASX 500.

“The statistics for women in family business are comparable with the statistics for women in corporate Australia,” says Family Business Australia chief executive officer Philippa Taylor.

Also, family businesses are more typically found in older traditional industries such as agriculture, manufacturing and retail, not the sort of sectors that women thrive in.  

Another explanation might be that many family businesses were started up by migrants who would have come from cultures with a certain view of the woman’s place in the family.

Despite these stats, however, women still play a significant role in family businesses. It’s just invisible.

One study of 98 Spanish family businesses, by Kristin Cappuyns from IESE Business School, found that women worked behind the scenes of family businesses, exerting an invisible power by playing the role of the peace-keeper and ‘glue’ that kept family relationships together. Women were the primary contributors to building social capital in family businesses, the stuff that makes a family business unique and provides that competitive edge. For example, women were more inclined to organise visits and family meetings, just to make sure everyone was kept in the loop.

Cappuyns writes: “Women have traditionally been seen as responsible for the family, performing duties such as education and child rearing, but they have also had a role as business advisor, and their position allowed them to provide a reminder of the balance between work and family. From their position behind the scenes, they have had a unique appreciation of interpersonal and developmental challenges. Furthermore, women are good at blending facts and feelings especially on very delicate issues… Relationships within families are dynamic and shift constantly during the life cycle of a family, and women are socialised to protect and nurture the family. Given the ability of women to perform several roles simultaneously, they can provide the pliable adhesiveness that holds changing families together. Although the role of the spouse behind the scenes in a family business is rather unacknowledged, they do have a very strong influence on the business, even if they are in a position that might seem very marginal. As such, these spouses often help provide a reminder of the need for balance between work and family, or they may take on certain family responsibilities, such as the creation of a family council, writing the family’s history, hosting family meetings, being the contact person for consultants, organising family retreats, planning family vacations etc”.

Based on that analysis, women instil a sense of what the business stands for and what this means to the family. Not everyone knows this so it needs to be transmitted and conveyed.

So even in the background, a woman can become the family business CEO, or chief emotional officer, which in turns means they are likely to have a major influence when it comes to deciding the choice of successor.

The problem remains, however, that for many family businesses, male family members will occupy professional positions in the company more frequently than females and as such, will be the ones who will decide on such key issues as shares distribution.

In an era where women are now going out and starting their own businesses, it might be time for family businesses looking at longevity to consider ways of integrating women more into the business.