The FINANCIAL — Women are more likely to take on a leadership position within a family business than any of their non-family counterparts, with 70% of family businesses considering and 30% strongly considering a woman for the CEO position. This is according to Women in leadership: the family business advantage, a report by EY and Kennesaw State University’s Cox Family Enterprise Center.
This report is based on research initially conducted by EY and Kennesaw State University called Staying power: how do family businesses create lasting success, which surveyed 25 of the largest family businesses in each of the 21 top global markets. Those surveyed represent businesses that average US$3.48b in sales and 12,000 employees.
These are some of the significant findings about family businesses that underscore their inclusion of women:
They average about five women in the C-suite and four women being groomed for top leadership positions
Women compose on average 22% of the top management team
55% have at least one woman on the board
Boards average 16% women — which is more than one woman per board
8% of the boards are at least 50% women
70% of family businesses are considering a woman for their next CEO, and 30% are strongly considering a woman for the top spot
When comparing these family businesses with overall global business statistics, the difference is striking. Women’s participation in top management globally was 12.9% at the end of 2013, and the proportion of women CEOs worldwide was 3.9%. Continuing the comparison to the percentage of women on corporate boards, the difference is even more stark, with the worldwide average board composition standing at 12.7% women at the end of 2013. It is important to note that family businesses are included in almost all of the global statistics about women in business, including these. If the worldwide family business data were separated from the non-family businesses worldwide, the disparity would be even greater.
Carrie Hall, EY Americas Family Business Leader, says:
“Family businesses may offer a path forward for all businesses seeking to achieve gender parity within their leadership ranks. Our analysis of this data suggests that inherent traits of successful family businesses contributing to their long-term success also create an environment that’s more welcoming and conducive to the development of women leaders.”
Supporting all women, not just family
The research shows that family businesses believe in the value of women in leadership overall, including women non-family members. Companies in the survey averaged just over one woman family member in a leadership position, but also averaged 3.5 women in the C-suite who were not family members. Additionally, these businesses said they were grooming an average of four women for a top leadership position — one family member and three non-family members.
The overall impact of women in management
The survey data also shows that having more women being groomed for the C-suite correlates with a business having higher growth targets and emphasizing their focus on long-term growth and sustainability of the business rather than short-term performance goals, such as meeting quarterly numbers.
Joe Astrachan, PhD, Professor of Management and Entrepreneurship, Kennesaw State University, says:
“These findings can lead us to reasonably surmise that having women in leadership is good for long-term, sustainable growth. And, a focus on long-term sustainable growth is a strategy that is a proven accelerator for women in leadership.”
A formula for success
The study uncovered three catalysts for women in leadership, which many of the surveyed companies had in common:
Role models. Family businesses that tend to have women in top leadership in the C-suite and on the board offer role models to less-senior women and clearly demonstrate that moving up the ranks and assuming leadership positions are possible.
Long-term thinking. Family businesses tend to think in very long time horizons. This long-term thinking and longevity contribute to the erosion of conscious and unconscious bias, making space for women at the top.
Inclusive environment. Family businesses balance the interests of the family with the needs of the business by emphasizing cohesiveness, inclusiveness and commitment to the well-being and wealth of the family and the family enterprise, including non-family employees. People — not just profits — matter. This is the kind of environment in which women thrive.
Peter Englisch, EY Global and EMEIA Family Business Leader, says:
“Some of the largest, longest-lasting family businesses in the world are moving women farther and faster than their non-family counterparts. These businesses are the giants of the world economy, employing vast numbers of people, dominating industries, and impacting local and global economies. How they operate when it comes to valuing women leaders shows a different, more enduring and sustainable path forward for business and for the world economy as a whole.”