Encouraging studies have examined women’s changing roles over the years. However, studies that examine the role of women in family businesses are sparse and fragmented. Various scholars have indicated the need for more systematic and extensive research into the factors that are affecting women’s involvement, leadership, and performance in family businesses.1, 2
This was an important area of focus in the STEP 2019 Global Family Business survey, and the in-depth interviews with prominent female and male family business leaders that followed. Based on the conversations that took place, “The power of women in family business: A generational shift in purpose and influence” takes an up-close look at the demographic shifts that are changing the role of women in family businesses, the value that women contribute, the various forms of influence they have and the unique competitive advantages they can deliver.
Emerging from the shadows
In the past, many women played a somewhat invisible role in their family businesses, working behind the scenes in administrative duties, as informal advisors and moderators or focusing exclusively on managing their households.
No one said it would be easy to break away from those traditional responsibilities. The very nature of the family business culture – and the multiple roles that female family members typically play – helped to keep the glass ceiling intact for women who had these dual roles, doubling their efforts in the business as well as in the family.
Even as cofounders or co-owners of their family business, women were often found on the sidelines, facing gender-based challenges similar to those found in the broader corporate world. Though many had some involvement (and certainly an interest) in the family business, women’s efforts and contributions were not always recognized or acknowledged in an official position or with monetary benefits as they assumed less visible roles as informal advisors, or performing accounting or administrative work.
In some cases, this phenomenon led some women to disassociate their identity from that of their husband in order to claim their independent authority and establish themselves as equal business leaders.
My husband and I run this company together and we do not promote the fact that we are husband and wife. We even use different family names so that we are not positioned as ‘husband and wife’ inside the company. Otherwise, employees and customers talk to me differently – as the CEO’s wife and not someone who has the ability to help solve their serious technical issues.
The ‘hidden’ CEO
Due to the influence of societal bias in the past, as well as cultural or family traditions in some cases, women were consciously or inadvertently consigned to the role of ‘chief emotional officer’ in some family business situations. In this 'hidden' CEO role, they took care of the emotional needs of the family, keeping the family together and perpetuating the family’s values and traditions.3
My mother was the guiding principle for the family and the entire company. She was the mother of the company, not just our mother, and everyone was clear that as long as she was there, everything would continue to run and we didn't need to worry.
The segregation of roles based on gender, both at home and in business, can be traced back to the Industrial Revolution. While men were associated with traits such as independence, autonomy, success and achievement, women were generally classified as nurturing and caring. Some of this gender bias continues today, even when it isn’t conscious.
Traditionally feminine characteristics such as loyalty, concern, sensitivity to the needs of others, problem-solving and conflict resolution genuinely reflect a holistic leadership style – for women and men. In a family business, these unique characteristics and the associated management style are assets to both the family and the business, combining loyalty to the firm and family with a sensitivity to individuals’ needs and a decision-making process that is based on instinct and intuition as well as evidence.
This is a constructive approach for any business and can create a potential competitive advantage in family businesses in particular.
How women are redefining ‘women’s work’
Industries that have traditionally been dominated by men are inclined to exhibit more gender bias than others. In such cases, women are encouraged to go into traditional ‘women’s jobs’, and their ability to be leaders of these businesses may not be well recognized.
Nevertheless, despite a conventional view of ‘women’s work’ in some parts of the world and in certain industries, a brighter light is shining through the glass ceiling of many family businesses. In what would have been considered a non-traditional female occupation in the past, particularly in male-dominated industries such as heavy manufacturing, an increasing number of highly competent women leaders are now standing confidently in the limelight.
Kwatani CEO Kim Schoepflin, is an example of just such a leader; a highly competent woman operating in a male-dominated industry that produces large-scale mining equipment. Through her leadership, she has started to push forward the growth of the business backed by a transformational agenda. Two women currently sit on Kwatani’s executive committee and comprise 75 percent of the company’s board and more than 50 percent of the management roles.
Several of the women in family business who contributed their views to the article are founders and cofounders of companies in industries that would historically be labelled as ‘men’s work’, including steel and scrap-metal processing, cement manufacturing and the production of hardware products. Their view is that there should not be a bias towards women or men in any business; that diverse ideas and experiences add tremendous value to a team, making it more interesting and generating higher levels of innovation.
Many of these female family business leaders are successfully breaking down the barriers and redefining how some women in family businesses may have been perceived in the past. They are not waiting for some other person or some other time for the environment to change around them.
While biases may persist in some parts of the world, industries and even among some families, the interviews have shown that the role of women in family business is changing and will likely escalate as a new generation of successors assume the business reins.
The transformational power of women
It has generally been held that women, by their nature, encourage more collaboration and consultation than their male counterparts. The women interviewed agreed with that view. Through the generations, many have been raised to be more sensitive to the needs of others and more social as mother, peacekeeper and caretaker.
Nevertheless, the female family business leaders interviewed raised a concern regarding women who are expected to have this naturally enhanced level of sensitivity and face the danger of being pigeon-holed as the chief emotional officer of the family business – and nothing more. When this is the case, there is a danger that female family members will not be socialized and groomed to internalize the business values and practices to the same extent as their male family members. And by not being given the same opportunities to actively participate in the business and build their own successful careers, they risk being left out of opportunities to assume leadership positions.
Family businesses led by female CEOs generally have a distinct transformational and less autocratic approach to leadership, as we observed in the transformational leadership style of many of the family business leaders with whom we spoke. The evidence generally shows that women tend to encourage individuals and teams to pursue new business opportunities, identify opportunities for change and make decisions on their own.
The innate characteristics of women as nurturers and caregivers can translate to a role as “chief emotional officer”, adding to the success and perpetuity of the family business. Their presence brings additional resources that the family business can capitalize on.
Women have unique and transformational leadership styles and skill, judgment and an outlook that makes them holistic managers and leaders.
Women in family businesses are continuing to work on role conflicts to pave their own path in the business and the family and resist being designated only as the family caregiver.
It is not possible to grow a family business with a leadership team that is made up exclusively of men or women.
Succession by merit
As highlighted in our first article in this series regarding the topic of succession, “The courage to choose wisely”, traditional family firms have often followed the implicit rule of primogeniture in matters of succession and inheritance – transferring the business from the father to the first-born child and often the first-born son. To prepare them for their future roles, sons have often been socialized around the family business during dinner table conversations at home and some early involvement in the activities of the business.
Sons and daughters often have different experiences in this socialization process, however. In particular, daughters can be heavily influenced by the family’s traditional gender roles, which are formed at a young age during regular interactions with the family. It is these types of experiences that may lead female family members to be more concerned about the family and its needs, than the needs of the family firm4 when primogeniture is the preferred succession model and they are not provided with the same opportunities for career growth as those of their male siblings .
However, the sentiment gathered from the conversations that took place is that change is in the wind in many countries across the globe with merit increasingly becoming the primary criteria for choosing the right successor.
The interviews with family business leaders have shown that even though primogeniture is still the norm for succession in many countries, as well as in individual family businesses, new rules in certain countries are opening up leadership opportunities for women in family firms. One important example is that of China, where the gender equality movement has raised the social status of women and the one-child policy has given women equal access to resources.
Further change is on the horizon, with improved access to higher levels of education coupled with shrinking family-size, and the STEP 2019 Global Family Business survey (PDF 19.9 MB) shows that the role of women in family business is continuing to progress.
The impact of societal change on family business leadership
To respond to the mounting need to address the issue of under-representation of women in top management positions, new national and cultural norms that advance the roles of women in family business are emerging.
As an example, in the last 2 decades, women's visibility in Venezuelan family firms has been favorably influenced by their greater involvement in the labor market. Many young women successors to Venezuelan family businesses have shown that they can take charge of their businesses just as effectively as their male counterparts. Such is the case in the Visani family, owners of Venezuela’s Inversora Lockey C.A, where the founder included his daughters in the family business from an early age – even though the family’s companies operated in what would be considered to be traditionally male industries.
While the female leaders interviewed do not support broad government-mandated social changes or quotas, there is evidence in some jurisdictions around the world that these measures have been successful in opening the doors to women.
In India, for example, the amendment to the Hindu Succession Act in 2005 conferred property rights to daughters (whether married or unmarried) and granted them rights equal to those available to sons. A subsequent legal mandate prompted family firms in India to increase the number of women represented on their boards compared to non-family firms.
Promoting gender balance at the board level opens the door for more exciting opportunities for family businesses to increase female representation throughout their companies. Appointing women in senior roles can create a ’trickle‐down effect‘, meaning more gender diversity at the executive level will translate into more gender diversity across the organization.5 This may be the lever that family business leaders need in order to make more female appointments in the next level of management and, ultimately, improve gender diversity throughout their entire business.
Recent social changes, whether mandated or voluntary, have had a profound effect on life in general and on family businesses specifically.
A challenge to outdated mindsets
Although the family business legacy may be handed down to them, women around the world continue to play multiple roles in the business as well as the family, and often shoulder the primary responsibility for the care of children and the household. Some continue to face the challenge of needing to prove their ‘legitimacy’ as leaders; to prove their mettle and succeed in managing and leading their business.
As with women in non-family businesses, women in family firms require strong networks that are not dominated by family influence as well as mentoring and guidance to orient them successfully towards management and leadership roles.
For young female family leaders, acknowledging and celebrating the efforts of generations of women who have preceded them is viewed as important. Women supporting women is more prevalent in the younger generations because of this mindset shift and a strong commitment for women to empower each other.
This is the way things should be for women in business, and family business leaders interviewed noted the importance of acknowledging that this level of support isn’t the way it has always been. It’s the hard work of countless numbers of women and men who have come before that has helped to open the door for a new generation of female leaders.
The unique challenges for women in family businesses include the blurred line between work and life, making it difficult to ‘switch off’.
When women feel invisible in their family business, they need skills, tools and opportunities to increase their visibility so they can’t be overlooked.
Legislative mandates and corporate governance measures are redefining the role of women across different economies, propelling them to positions of power and leadership.
Gaining a fresh perspective on family business leadership
Women and men have an opportunity to strengthen their family businesses by embracing their differences and not fighting against them.
Family businesses that are committed to empowering women might start by evaluating their beliefs and perceptions and encouraging open discussions of everyone’s viewpoints within the family, especially those among different generations and genders, even if those conversations may be uncomfortable at first. The courage to be candid and open to a new perspective has the power to change an existing and likely outdated narrative regarding the roles that women play in family businesses and the competitive advantage that they can contribute in the future.
The good news is that women in family businesses are strategically placed to bring about this change in their own companies – and in society at large – as role models and guides for the next-generation women who will contribute to the future talent pool.
A diversity of views and approaches has tremendous power in helping to move family businesses toward more interesting and prosperous futures. Greater diversity also harnesses the resilience and adaptability that are the hallmarks of family businesses and as leading voices at the forefront of change.
- (Mussolino, Cicelin, Iacono, Consiglio, Martinez, 2019; Gimenez-Jimenez, Edelman, Minola, Calabrò, Cassia, 2020).
- Gimenez-Jimenez, D., Edelman, L. F., Minola, T., Calabrò, A., & Cassia, L. (2020). An Intergeneration Solidarity Perspective on Succession Intentions in Family Firms. Entrepreneurship Theory and Practice.
- Lyman, 1988; Salganicoff, 1990
- Decker, R. A., Haltiwanger, J., Jarmin, R. S., & Miranda, J. (2017). Declining dynamism, allocative efficiency, and the productivity slowdown. American Economic Review, 107(5), 322–326.
- Gould, J. A., Kulik, C. T., & Sardeshmukh, S. R. (2018). Trickle‐down effect: The impact of female board members on executive gender diversity. Human Resource Management, 57(4), 931-945.