Gender and the Family Business: The Age of Opportunity?

By Maya Prabhu, Managing Director, Coutts Institute

One of the most significant trends in family businesses the world over is the increased prominence of women into more public and visible roles in the company. Historically, women in family business have had to conform to take less visible roles largely due to social custom and family tradition. A case in point is Angela Burdett-Coutts. Angela’s grandfather Thomas Coutts was the creating force behind Coutts Bank and the senior partner until his death in1822. Angela inherited his share of the business on the condition that she was not to ‘interfere’ in the running of the business following social custom in Victorian times. Fortunately, that did not hold her back from becoming one of the most prominent and progressive philanthropists of her time. She was made a Baroness in her own right by Queen Victoria for her philanthropy. She never sought publicity, and most of her donations were made anonymously. In fact, she was often listed in donor lists to well-known charities as ‘the lady unknown’.  Her story underlines the difficulty that women can sometimes face, even today, in taking public roles involving power and leadership.

Let us explore the roots of gender roles in the family to understand the context and the impact it has on the roles they may take in the business. Moreover, we will define the roles currently played by women – visible and invisible. We will conclude with highlighting some gender trends, including a focus on the evolving role of men in the future and the opportunities they present for the future.

Understanding the roots of gender in the family business

Angela’s story holds a mirror to her family’s culture and social norms at the time. As Hollander and Bukowitz (1990)[1] state families typically have spoken and unspoken rules about some subjects that are perpetuated through family folklore and mythology. Rules about who inherits money or shares, how conflicts are managed (or not!) and roles that men and women play are common. Some rules are explicitly gender-based – for example the rule of male primogeniture in the context of a family enterprise stipulates that the first born son will inherit the mantle of family leadership and also business leadership. This was particularly prevalent when land was the main asset, and it was felt that dividing it would make it unviable. Further, rules and roles have tended to be polarised along gender-based lines. To help understand why, Hollander and Bukowitz (1990) point to Walters analysis in The Invisible Web (1988):

Raising a son is not primarily about raising a father nor even a husband although this may be part of parental expectation. Rather it is about raising a man, a worker, a person of public pursuit and individual achievement, an autonomous individual. Raising a daughter is primarily about relationships, caretaking, homemaking, attachments and affiliation, private and inter-personal achievements … So mother’s job is to affiliate their daughters with intra-familial life and to affiliate their sons with the extra-familial. 

While norms have historically held women to the intra-familial space thus excluding their talents at least publicly from the business, they have likewise excluded to some extent the role that men can play in nurturing children. You have the classic stereotype of the men out working all hours of the day and night and the children largely seeing them as absent from their upbringing.

These sedimented family norms most often transfer into the family business. The cultural context of the family is an additional driving force to developing the family’s social norms and rules about therefore roles played by different members of the family.

This boxing of men and women in the family into certain roles due to gender is a missed opportunity. The talents of family members are not harnessed and they are playing roles based on their gender rather than based on their interests, competence and strengths.

Roles that women play

 Let’s now look at some of the invisible and visible roles played by women in the family enterprise and examine some of the emergent trends.

At the start of some businesses, the wife often plays the role of Chief Diary Manager and Bookkeeper, relinquishing such roles usually when the business grows and can hire staff to take on these functions. This development often coincides with the arrival of children and as such she takes the lead in managing children and sometimes in-laws giving her husband the time and space to focus on growing a fledgling business. She often acts in this role as an adviser and confidante to male members of the business. 

In some families, the role of women is mostly that of nurturer, providing the emotional glue and is still largely invisible unless there is a public conflict in the family. Often referred to as the Chief Emotional Officer, these women are often the backbone of preserving some of the most important characteristics that make a family enterprise successful: the nature of ‘family-ness’, articulating and sharing core family values, managing the dynamics of generational transition and supporting their husbands, in-laws and children. It is recognised within the family as a very important role but is usually unrecognised, mostly unrewarded (even in a non-financial sense) and highly invisible.

We began to see women take a more public role typically when they were widowed, particularly if it was premature or without a clear succession plan in the form of Emergency Leader. In the case of a particular family business, the Patriarch died leaving behind a $500m turnover business and three sons in charge. As rifts began to appear, the sons decided to each run one of the Group companies with their mother as Chair of the Group Board. In other instances, a Patriarch has died leaving young children and his widow has stepped in to manage and govern the business till the children come of age.

In some families, a husband and wife team are establishing businesses together as Co-preneurs or wives are encouraged to establish their own business under the auspices of the family business. In this case the husband and wife are seen as a team running the business with complementary skills.

In many families around the world, we are seeing women step out into the limelight as Head of the Family Foundation. It offers daughters, wives and daughters-in-law who may have hitherto not been involved in either the management and/or ownership aspects of the family enterprise to play a visible leadership role that is also acceptable by social custom. Some families believe that this role is a natural evolution from the more invisible role of ‘Chief Emotional Officer’ and captures some of the core skills of the women as nurturers and inter-generational stewards of the family’s values. Whilst in some cultures this is an emergent role (eg. parts of the Middle East and Asia) that is gaining prominence, in others the pendulum has swung in the other direction, where young women are refusing to be ‘fobbed off’ as they see it with what they perceive as a soft role. They are demanding to be considered for positions of power and leadership in the business based on their education and skills.

Finally, we have the most publicly visible roles those of CEO and/or Chair of the business. One of the emergent trends we see in many parts of the world, is that of women taking on these roles in the family business. This is due to a number of reasons.

The first is that there is as much of an emphasis on a daughter’s education as a son’s. As young women are taking these opportunities, they are returning to the family business with strong qualifications and clear business talent.

Secondly, as women are taking more prominent roles in politics, academia, the professions and public companies, social norms and therefore family norms in diverse cultural context  it is becoming more culturally acceptable for women to hold senior positions in family businesses.

Simple demographics is also playing a role. As families are becoming smaller in size, some have daughters only in their next generation. Where the daughters are keen and talented, families still prefer to give them the leadership role than leave it all to non-family professionals. One of the key competitive advantages of a family business can be the nature of trust that exists between family members. Families are keen to retain this USP.  

As families around the world develop their family governance, several further roles are emerging where family members can play the role of the Head of the Family Council has become a prominent one in acting as the bridge between the family and the business, including fostering family communication and information sharing and preparing the next generation of owners and business leaders. Whilst this is not so much a public facing role, it is one of enormous prominence and visibility within the family and a role that used to be the male preserve is now played increasingly by both men and women. 

Another is that of the Head of the Family Office – a leading role within the family and outside in managing the family’s wealth and investments, building team decision-making across family members and liaising with external advisors.  

It is important to note that all of the roles described are important for the family enterprise and deserve equal recognition as such.

Gender: The Age of Opportunity?

The exciting emergent trend is that prevalent social and family norms are slowly changing to recognise the public roles that women can play. At the same time, there are some examples where men in the family are playing some of the so-called ‘softer’ roles as heads of family foundations or even as stay at home dads. Business families are no different and are also experiencing, if not leading the field in reflecting these changes.

Whatever the obstacles for women and for the business, there is a compelling case for encouraging men and women into roles that match their skills with the needs of the family and the business. Open communication and decision-making can play a vital role in facilitating this.

Other things that can help:

•  Recognising the vital roles that family members play behind the scene as well as in the more public visible roles.
•  Create a climate of meritocracy, where talented men and women are invited to apply for leadership roles (within the business or as heads of foundations or family office or family council) and treated fairly in the selection process.
•  To attract women into management roles, be creative about adapting traditional business procedures to make them more parent-friendly.
•  Ensure that men and women in various family leadership roles have the right development plans in place with support networks or mentoring at home and work.

Ultimately, whilst at times uncomfortable because it may challenge convention, placing family talent (men and women) in roles in which they will be happy and thrive and contribute to growth in the business as and the family, regardless of gender, offers an unparalleled opportunity for family members and the business to nurture family talent and retain the key to the fairy dust of trust. Trust that can provide competitive advantage for the business, preserve family harmony and further the longevity of the family business for generations.