The older the family business, the less likely women will have control

Pam Nicholson is something of a rarity. The St Louis-based manager is CEO of Enterprise Holdings; she also sits on the board of one of the world’s biggest private companies.

Yes, Nicholson is a rarity when it comes to women in top positions at big corporations. Out of all the CEOs of the 2018 Fortune 500 list, only 24 are women, down from 32% in 2017. Women in top positions at family businesses are better represented at a senior level, according to some survey data. But when it comes to women at older family businesses, they are being squeezed out of top positions. That could have long-term negative consequences for these businesses as gender biases become harder to hide.  

When it comes to members of the next gen of the family owners, evidence suggests they still prefer male heirs

The research, by the professional services group PwC, found that women only average one in five board members and fewer than one in four on the management team of all family businesses, regardless of size. But for family businesses which have passed to the 3rd and 4th generation of control, the ratio gets worse. For the board of director positions, the average percentage of people who are women on the board is 18% for third gen-owned family businesses, and this ratio falls to 17% for fourth gen family businesses.

The PwC research involved speaking to around 3,000 businesses of various sizes in 53 countries.

Women are more likely to have management roles in family businesses, but again, this is better the newer the family business. The average percentage of people on the management team of a first gen family business who are women is 28%. This falls to 24% for a second gen family business and drops again to just 19% for third gen family businesses. Inexplicably, the ratio improves marginally among fourth gen family businesses, rising to 20%.

When it comes to members of the next gen of the family owners, evidence suggests they still prefer male heirs. According to the PwC research, the average percentage of the next gen of owners working in the business who are women is 25% for first gen family businesses, but this falls to 22% in the second and third gen family businesses, with a slight uptick to 23% for fourth gen family businesses.

To address the scarcity of women in family businesses, particularly among the next gen of owners, PwC has launched a new initiative with the IMD Business School in Lausanne. “Our new NextGen – Women Excellence Academy is the only course offering personal development support for 22 to 32 year-olds female successors,” says PwC Andrea Baars, nextgen education leader for PWC.

Initiatives like this and the others promoted by professional groups and universities should help to even the playing field for women at family businesses in the years ahead. At the very least, they will bring the imbalance into stark contrast and help to facilitate women getting more top positions at family businesses.