In a recent report Swiss private bank Julius Baer pointed out that family wealth has increased in the past years in Europe. As part of this they listed the wealthiest 10 men and women on the continent. All 10 of the women had inherited their wealth from family businesses, while only two of the men had.
Not all inheritors will receive as much money as Liliane Bettencourt or Susanne Klatten, who inherited their wealth from L’Oreal and BMW respectively, did. But should family businesses be seen as a way for women to become rich and powerful in a world where it still hard for them to do so through other means? Are they inherently progressive, or even feminist?
Maybe, because it seems that family businesses are becoming increasingly open to the idea of welcoming women into management roles. Research in 2011 found that that a total of 44% of the directors at UK family firms were women. At the time the figure for the FTSE 100 was 12.5%, and more than half of FTSE 250 companies had no women directors.
Shaheena Janjuha-Jivraj, a member of a family business who teaches at Henley Business School and also runs Boardwalk Leadership, a consultancy, says that a decade ago 75% of people on family business courses she taught were men, while now the split is 50/50.
“There is an opportunity for women to carve out roles for themselves,” says Janjuha-Jivraj. “I think we are seeing women moving from the periphery and maybe playing a social welfare role, to playing more of a leadership role.”
This could be the result of a wider cultural shift, as women are more likely to become lawyers and accountants — the sorts of skills that family firms need — and also because baby boomers are more willing to hand businesses on to their daughters, not just their sons.
A female next gen thinks this trend is only natural. “The nature of a family business is that the parents want their children to come into the business,” she says. “it doesn’t matter if it is a boy or girl, they will want them to take that position. By virtue of it being a family business you are nurtured for senior roles.”
Research by Merrill Lynch has shown that woman-owned family businesses outperform male-run ones, and there is growing evidence that firms with women on boards are more successful.
Even in more conservative countries, women are getting more power. Janjuha-Jivraj says that as a result of shariah inheritance laws and the prevalence of family-owned businesses there, in the Gulf region 30% of people on company boards are women. How this influences those companies’ performance will be interesting to see.
But it is not all plain sailing for women in family firms. Amy Katz runs an American consultancy for women in family businesses called Daughters in Charge, and says that women’s entry into family businesses is “often unexpected.” She adds that they are not “expected to assume the role of leader or successor” as men often are.
Especially if the industry is male dominated, they might find it hard to find the right job. “I’ve found many daughters who pursue a marketing or communications role in industries where that has not been a priority,” she says.
She adds that in the past women have often been in “backstage” positions, but “that is changing as more women become educated, and as more fathers and mothers recognize their talents early on and prepare them for significant roles.”
Others think that those “backstage” roles can in fact be very important. Shaheena Janjuha-Jivraj argues that even in they don’t have official jobs, mothers “can end up doing a serious amount of negotiation between the father and the kids, particularly the father and the son”.
She calls them “invisible buffers” or an “unofficial HR department” and says that especially in countries where there is a stronger collective culture and businesses are more embedded in society than they are in the west, they can have huge amounts of power.
The next gen suggests that one of the reasons there are no self-made women on the European rich-list is that upper middle class women can afford to take time off work when they have children, which has previously dented their ability to make fortunes. However, things are changing. The internet might make it possible to build a fortune in future without working office hours.
In 20 years’ time, there might be some non-family business interlopers in that list.