The succession of the family business remains a perceived issue for women in line, many of whom believe that males in the family are expected to do the job. Numerous reports, however, highlight that women not merely have the ability to lead businesses, but may also be better positioned to run them successfully. According to a new study, women are in fact more attuned to the demand disruptive technologies may have on the future of their family’s business.
Research from numerous sources have found that women in leadership positions provide businesses with benefits to a range of key metrics, including revenue and profit. Yet, women are still under-represented, or even un-represented, in the senior leadership of many businesses in the OECD. 40% of Norwegian companies may have women on their boards – the Scandinavian countries generally are way ahead of the rest of the world – with among others France (26%), Australia (23%), the UK (22%), and Germany (20%) lagging behind. At 16%, the US is actually below the OECD average of 17%, and the figure is as low as 2% for Japan.
Likewise, PwC’s Women in Work Index, recently released for 2016, finds that woman are also under remunerated – a women on average earns $83 for every $100 earned by a man doing the same job.
In a new report, PwC, a global accounting and consulting firm, studies the situation faced by next generation women in family businesses, and how they feel about the prospect of leadership. The study involved 73 interviews with women that are part of families whose businesses are collectively valued at $15.9 billion.
Protecting the capital
The news regarding the representation of next generation women in the directorship of family businesses is relatively good, with respect to the wider business community. 30% of the women interviewed have a board room position, compared to 55% of men, which is well above the OECD average of 17%. Additionally, over half the women interviewed, disagreed that their gender would be a barrier to them running the family business, compared to other types of companies, and nearly the same number responded that their firm recognises the value of having women in key positions.
The typical cultural interpretation of an old family business being tied to male lines, many of which are reluctant to change their traditional business and cultural models, may – according to the firm – not be the case. Henrik Steinbrecher, PwC Global Middle Market Leader, says: “Family owned companies have repeatedly told us that they care about fostering talent with the key skills they need to excel in the market. This is perhaps why women working in family businesses are getting more opportunity. And, while there is still work to be done to reduce the gap in terms of gender bias and access, the family firms who identify and rectify the issue, [sic] this into a positive opportunity for them.”
The survey further highlights that women perceive slight bias toward males succession, whether direct decedents or cousins, as 45% of survey respondent agree that generally speaking next generation males are more likely to be expected to run the business. Furthermore, 77% of women respondents agree that the current generation has confidence in their ability to lead the future, compared to 93% of men. Many women also seem to discount themselves as the natural heir to the chair, with 21% of women agreeing that they expect to manage the company one day, compared to 31% of men.
According to the authors, the perception women have about their adequacy for the role of successor to family businesses may, in many instances, be the result of unconscious bias and assumptions about traditional family structures. According to PwC, a number of strategies exist to overcome such biases, including experience outside the family business, mentorship and leadership training.
The study further considers the role this generation, male or female, has on the future of the family business. The consultancy focuses particularly on digital technology, being one of the major additions to the business environment in recent years. The survey found that women, more than men, are concerned about the potential for digital to disrupt their family’s business, at 37% for women versus 24% for men. Women are finding it more difficult, however, to convince the business of a need to have a clear digital strategy in place, at 44% of women compared to 34% of men. Women are also more concerned about their family businesses' ability to keep up with digital changes, compared to other businesses, at 36% of women versus 27% of men.
Looking down the line, Steinbrecher concludes: “Having females in decision making senior roles gives the business a competitive edge. So it’s important for family firms to implement a structure of support that develops clear career paths, and provides both male and female next gens with the right training and mentoring to succeed in managing the family business regardless of gender.”