Gender parity in family business: How long till we get there?
Though more opportunities for women in family firms have opened since the 1980s, it’s still rare for a woman to be named to a top business leadership role.
When Charlotte Lamp was growing up in the 1950s and ’60s, no female family members worked in her family’s business, Port Blakely. The company, which is based in the Pacific Northwest and has been owned by the Eddy family since 1903, owns and manages working forests and markets renewable forest products.
Lamp’s brothers had summer jobs at Port Blakely, but “I was not allowed to, because I was a girl,” she says. In college, Lamp was a biology major and chemistry minor with a number of elective courses in field biology areas, but still she was barred from working in the forests. Although she didn’t realize it at the time, some of her female cousins also wished they could work in the company.
Lamp, a third-generation shareholder, says the opposition to women’s participation began with her grandfather, one of the first Eddy family members to lead the business. He believed “women at the table were to be seen and not heard,” Lamp’s mother told her. The second-generation CEO perpetuated that culture.
It wasn’t until after third-generation member Jim Warjone became CEO in the 1980s that attitudes toward women’s participation began to soften. By the 1990s, the company had a female field biologist, though she was not a family member.
A task force was convened in 1999 to establish a family employment policy. The first Eddy family council grew out of that task force. One of the issues around family employment the task force was asked to address was the employment of women.
Social change and technological advances since the mid- to late 20th century have dramatically changed the way business is done, and many family firms now have women in key roles. Port Blakely, for example, currently has a majority-female board, and all its family directors are women.
Even so, studies indicate family businesses are still a long way from achieving gender parity. The Successful Transgenerational Entrepreneurial Practices (STEP) Project, a consortium of researchers from 48 universities around the world, surveyed more than 1,830 family businesses and found that only 18% of their current leaders are female. Women lead just 7% of the North American family firms, compared with 43% of the European and Central American companies and 25% in Latin America and the Caribbean.
“It’s better to have diverse folks at the table. That makes your company stronger,” says Betsy Cowles, fourth-generation chairman of Cowles Company, a Spokane, Wash., enterprise whose portfolio of businesses includes newsprint, forestry, broadcasting, print media, real estate and insurance.
Ann Dugan, senior managing director of advisory services at the Family Office Exchange and coauthor of A Woman’s Place … The Crucial Roles of Women in Family Business (Palgrave Macmillan, 2011), says research shows that family members who rise to the top have benefited from “individual attention and thoughtful planning.”
It’s important for daughters as well as sons to receive leadership training, says Dugan, a fourth-generation member of the family that owns Lang Building Supply of Brunswick, Ga. “Part of that could be educational, but obviously a big part of that is experiential.”
“I think there are more opportunities for parity in family businesses now than there were in the past,” says Susan Remmer Ryzewic, president and CEO of her family enterprise, EHR Investments, and director of The Remmer Family Foundation Inc. “And there are more opportunities for parity in family businesses than there are in other businesses. But I still think that there’s a long way to go.”
Cowles spent three summers during college as an intern at her family company. She worked as a lawyer in Seattle before joining the family firm at age 29. Her brother, William “Stacey” Cowles, who also had experience outside Cowles Company, had entered the family business two years earlier. Their father, the company president, died suddenly before Betsy moved back to Spokane.
“The transition to leadership for us was very abrupt,” she says. “The two of us really had to figure out our own roles with each other.” They served for a while as vice presidents under their uncle, who had succeeded their father as president.
Today, Stacey holds the title of president and Betsy is chairman, a title that previously didn’t exist in their family business. While the titles might indicate a hierarchy, they each have distinct areas of responsibility and work closely together as equals on strategy and major decisions.
“My mother was very much a strong feminist, so I was fortunate enough to grow up in a household where I was told I could be anything I wanted to, and the same went for my brother,” Cowles says. “So there really wasn’t a presumption that it was going to be the men who took over.”
Yet she encountered sexism from outside the family business. “As a younger executive, when I traveled to industry meetings, people would presume that I was the assistant, the secretary or maybe even the girlfriend of one of our senior male managers.”
Anne Klamar, now board chair of family-controlled Midmark Corporation, based in Dayton, Ohio, joined the company’s board in 1993. The board named Klamar, a fourth-generation family member, as president of the company in 2000 and CEO in 2003. She stepped down from the CEO post and became board chair in 2016.
Klamar, a physician, had not planned to lead Midmark, a global manufacturer and supplier of healthcare products and equipment and diagnostic software. A brother who had been expected to succeed their father had left the company; the brother later passed away. An outside president appointed after Klamar’s father retired in 1995 didn’t work out, and her father returned to the presidency until Klamar was named to the position.
“My dad was pretty disappointed that he was going to have to put a daughter in the role of leader of the family company,” says Klamar. “He would have much rather have a son in that role.”
Klamar’s father, when speaking to her privately, expressed doubt that she could succeed as a woman in the healthcare industry.
His comments “really fired me up,” she says.
The team she inherited, she says, was “largely male.” She wanted to hire women in executive roles, “but it was not an easy trend to change, particularly in our rural location. But, that said, my team grew from pretty much all male to having one or two females in the C-suite.” Today, Midmark’s board consists of five women and four men.
“It’s pretty uncomfortable being the only woman in the boardroom,” Klamar says. For many years, she was the sole female on Midmark’s board. “I spoke rarely,” she recalls.
“It was a yes-man, good-old-boys, ‘dad’ board. I felt like token diversity.”
Dave Phillips, who had had a 32-year career at Arthur Andersen, joined the board in the late ’90s and offered Klamar his advice. “He was a really strong mentor for me in finding my voice in the boardroom,” she says.
In 2004, Klamar joined with other women to form Professional Women in Healthcare, a leadership-development organization that helps empower women in the industry.
“While I’m seeing more women in leadership roles in family businesses, what strikes me is how proud their fathers are of their daughters,” Klamar says. “I’m not sure that they wouldn’t be equally as proud of a son, but that leads me to believe that the father — the patriarch — may feel as though the climb for a woman is a little bit steeper than, perhaps, for a male heir.”
Julia Klein, now chairwoman and CEO of C.H. Briggs Co., a Reading, Pa.-based distributor of specialty building materials, entered the business after working in public policy and politics. Her father, the second-generation leader, hired her to work at the family firm’s first acquisition.
“Like all young women, it was difficult for me to be taken seriously” despite impressive academic and professional credentials, Klein recalls.
“My father was also pretty quick to retire and move on, and I struggled to build credibility with his team. I see part of that as being gender-related, and part of it certainly age- and experience-related.”
Klein is now the sole shareholder of C.H. Briggs; she bought out her brother and parents and unwound the company’s ESOP. “I’ve often said to women in corporate America that the way to break the glass ceiling is to build your own house,” she says. “I think I would have done that even if I wasn’t interested in my family’s enterprise.”
It took a while for her to develop an interest in working in her family firm. A politician she worked with who came from a business family helped her realize that C.H. Briggs could be a vehicle for her interests in economic development and job creation.
Her father had been sending a similar message, Klein says. “He thought that I would enjoy business because it was about strategy and people and money, and I just didn’t get it. And then finally I got it, and he was exactly right.”
Governance offers a way in
The growth of family business as a field of research and practice since the mid-1980s has resulted in an emphasis on governance as a way to manage issues at the nexus of family and business.
Family councils and other family governance structures enable family members to contribute to the family enterprise even if they don’t work for the family business. Some women (as well as men) who proved themselves as leaders through service on the family council have later assumed roles in the family business or on the board of directors.
Susan Hanas, a third-generation member of the Duda family, built a career as a teacher, principal and superintendent of a private school while her brothers and male cousins learned to run the family business, A. Duda & Sons Inc., an agricultural and real estate company based in Oviedo, Fla.
Hanas served as chair of the Duda family council from 2004 (the year the council was formed) until 2012. She was elected to the company’s board in 2013 and was elected board chair in 2015. She is the first woman and the first family member not employed in the business to chair the board.
Hanas credits her leadership success to listening rather than talking, running effective meetings, learning from others in the room and working with people in all positions. She also sees herself in a unique role due to her gender and generation: She knows what has been done in the past and serves as a role model for the family’s future female leaders.
“When the third generation retired from Duda, their understanding of family, family shareholders and the business changed,” says Hanas, the youngest living member of G3. In one generation, the percentage of female family members working in the business jumped from zero to 37%. In fact, the fourth-generation women represent 44% of the family management team.
Beyond employment at Duda, women have also served in various capacities within the governance structure. Today, three female family members serve on the Duda board (30%) and seven women serve on the family council (63%).
Klein agrees that the focus on family governance has created more opportunities for family members to serve in leadership roles. “I’d also say that when there’s good governance, everything is just more professionally run, hopefully, and that can often take away some of the intrafamily drama,” she notes. “So as businesses get bigger and more sophisticated and are better governed, there is more ability for the cream to rise to the top — for real talent to be recognized. And that always helps women, regardless of the hat they’re wearing.”
“The family governance structure emphasizes the fact that you need to pull in all of the talents of your family — male or female,” Cowles says. “Because that just makes your whole family enterprise stronger for the long run.”
While acknowledging that family governance roles can be a good training ground for future leaders, some lament that in many firms these positions have been the only ones offered to women, while men are given a chance to serve in the business or on the board.
“You don’t have to be CEO to be a female leader in a family business system, but it’s interesting how these sorts of roles, which may be considered by some as softer and non-essential to the business, seem to be held by more women than men,” Klamar says.
“I’m not sure how easy it is for people to move from a family council — which is dealing more with questions the family has and avenues for communication with the business — to being on the business board, unless someone is interested and has the willingness and the ability to learn more about the business,” says Remmer Ryzewic.
“I think that varies a lot by the individual family and how much education they provide to the family over the years. Some of these families are really great at providing training programs, but a lot of them are sort of haphazard about it.”
A non-family female CEO
Anecdotal evidence indicates that most non-family CEOs of American family firms are male. GOJO Industries, maker of Purell Instant Hand Sanitizer, is an exception. In January, non-family member Carey Jaros, who had served as GOJO’s chief operating officer, became president and CEO of the Akron, Ohio-based company.
The promotion of Jaros is especially noteworthy because she serves alongside an executive chair who is also a woman: third-generation family member Marcella Kanfer Rolnick, who assumed that role in May 2018.
Kanfer Rolnick notes that GOJO was founded by in 1946 by a wife-and-husband team (her great-aunt and great-uncle, Goldie and Jerry Lippman), “and women have played important leadership roles in our company ever since.
“We have a history of building successful leadership teams by combining perspectives from within my family and beyond. We are continuing with this strategy, and Carey was the best person for the job.”
Jaros joined GOJO in 2016 as chief strategy officer and was named COO in 2018. “Carey brings a rare combination of strategic and operational skills,” Kanfer Rolnick says. “Her background as a business and strategy leader at GOJO and previous companies, as well as her many years as a strategy consultant, have prepared her for this role.
“As a leader, Carey is fearlessly optimistic, courageous and passionate about helping team members develop and grow.
“We have been planning our leadership transition for many years. Carey has been distinguishing herself through her contributions and hard work, so it hasn’t come as a surprise.
“Both of us have received an outpouring of well-wishes from employees, distributor partners and the community.”
Changing the culture
Do women aspiring to leadership in their family companies today face fewer challenges than their mothers and grandmothers did? Klamar says things are different now, though perhaps not easier.
“It probably depends on the situation, but I do see more mentoring of females, particularly in our industry, than I have seen in the past,” she says. “And if you have an openminded mentor, that path is a lot easier to travel than one where barriers may continually be put up.”
Lamp points out that it’s very difficult to change the culture of an organization. “You can’t change culture by rulemaking.” Change most often comes about through “little baby steps,” she notes.
When successful female family business leaders share their experiences publicly in a relaxed atmosphere, such as at conferences, old-school thinkers begin to see diversity as a viable option, Lamp says.
Lamp points out that a woman with an exceptional résumé doesn’t need to beg for a job in her family’s business. There are plenty of good career opportunities elsewhere.
“If she is in a family that is not going to acknowledge who and what she is,” Lamp asks, “is she going to work from within that family to change [the tradition of male dominance]? Or is she going to walk away?”
The war for talent shows no sign of abating, “so we really can’t afford to overlook half the population,” Klein says.
Recent studies show family business women in North America are still waiting for the chance to take a seat at the head of the table.
In a 2014 Ernst & Young survey of 525 of largest global family businesses, 70% of respondents reported they were considering a woman as their next CEO, and 30% said they were strongly considering a woman for the top job.
The findings hinted that gender parity might be just around the corner. But four years later, those plans had not come to fruition. In the 2018 edition of EY’s survey, only 4% of the respondents had a female CEO.
Family business owners like to think of their companies as flexible and creative. But in terms of providing opportunities for women, the family firms in the 2018 EY study are less progressive than the corporations in the 2019 Fortune 500, where 33 of the CEOs (6.6%) were female.
Smaller family companies seem to be more inclined to appoint a woman as the business leader, judging from the results of the 2019 Successful Transgenerational Entrepreneurship Practices (STEP) study, which surveyed more than 1,830 global family business leaders. Of the companies in the STEP study (94% of which had revenues of US$250 million or below), 18% were led by women.
While the overall STEP results are encouraging, the findings indicate that prospects for women from North American family firms remain grim. Family businesses from Europe and Central Asia had the highest percentage of women CEOs (43%), followed by companies from Latin America and the Caribbean (25%) and Asia and the Pacific region (20%). The percentage of women CEOs in North America was down in the single digits (7%) along with the Middle East and Africa (5%).
Matt Allen, a Babson College entrepreneurship professor and STEP academic director, notes that the North American findings are especially puzzling in light of women’s educational achievements. According to a 2018 study from the Georgetown University Center on Education and the Workforce, roughly 3 million more women than men are enrolled in postsecondary education in the United States.
“It makes me wonder if women are actually self-selecting out of the family business because they’re finding better opportunities elsewhere” with their solid educational credentials, Allen says.
Another factor could be the higher retirement age of family business leaders in the United States compared with their global counterparts. The STEP study found that 15% of North American family businesses are led by CEOs born between 1925 and 1945 — more than double the global average.
“I think as we transfer out of this current generation into the next generation, we’re going to see the U.S. catching up with some of the other countries,” Allen says.
Male family business leaders globally retire later than women leaders, the STEP study noted. Andrea Calabrò, who is the STEP project’s global academic director as well as the academic and managing director of the IPAG Family Business Institute at IPAG Business School in Nice, France, analyzed STEP data for Family Business and found that women CEOs tend to retire between ages 56 and 70, while male family business leaders generally retire at ages 61 to 75.
The STEP study reported that 31% of family firms worldwide had women on their boards. In this regard, North American family firms were more in line with those from other regions. Of the North American companies, 34% had women on their boards, compared with 37% in the Middle East and Africa, 32% in Latin America and the Caribbean, 31% in Europe and Central America and 24% in Asia and the Pacific.
According to reports cited by Catalyst, a nonprofit organization that advocates for greater workplace inclusion for women, boards need multiple women in order to reap the benefits of gender diversity. “Boards that are at least 30% women offer a positive environment for innovative ideas to spring from gender diversity,” Catalyst notes on its website.
The 2018 EY study of the world’s largest family companies indicated that these giant firms have not achieved Catalyst’s recommended percentages. The EY study found that only 16% of the board members at these large family businesses were female.— Barbara Spector
Success Tips for Family Business Women
Advice for families:
1. Encourage all NextGens, regardless of gender, to engage with the business. Educate them in the business fundamentals and teach them to be good stewards. When they’re young, take them on tours of company facilities. When they’re older, take them to industry meetings. Offer summer internships in the business. Urge them to take on leadership roles in school or in non-profit organizations. Appoint them to family council committees — and help them along the way.
The senior generation shouldn’t just throw NextGens into the deep end. Older family members must make themselves available to mentor the rising generation, says Betsy Cowles, fourth-generation chairman of Cowles Company, Spokane, Wash. “There’s a responsibility for the older generation to tee these opportunities up for the younger generation —men and women,” Cowles says.
Senior family members should give NextGens the opportunity to learn from challenging assignments and should arrange follow-up meetings to discuss how the project was handled.
“Dads have a really critical role to play,” says Julia Klein, third-generation chairwoman and CEO of C.H. Briggs Co. in Reading, Pa. “I don’t want to underestimate the importance of a dad sharing his belief in his daughter.” Fathers, Klein says, should be “equally encouraging of their sons and their daughters to take risks, to meet challenges, to try for big things, to really train and to excel.”
2. Don’t appoint an underqualified woman to a board seat or other key position just to achieve gender diversity. Make sure all family directors are well trained to be strong contributors. “Give the women in your family business a hand up, not a handout,” says Anne Klamar, fourth-generation board chair of Midmark Corp. “And don’t tokenize them in the business or in the family governance, because that will just continue the process of gender discrimination.”
3. Rotate people on and off key governance positions to give more family members a chance to serve. Require board directors, owners council members and family foundation directors to step down from these posts after a certain number of terms. (Several family businesses allow family directors to serve an unlimited number of terms but require them to rotate off the board periodically.) Ensure equal opportunity for all qualified family members to serve in roles such as board committee chair, says Ann Dugan, senior managing director of advisory services at Family Office Exchange.
4. Be aware that relationship building isn’t solely women’s responsibility. Family relationships are built through shared experiences, notes Charlotte Lamp, a third-generation shareholder of Port Blakely, based in Seattle. “You play together, you work together, you share together, and if you’re spread out [geographically], you purposely and intentionally come together.
“How do you pass on the story of your legacy? At one time it was the women in the kitchen. But, now, you share in that conversation.”
Advice for young women:
1. Focus on your career development. Develop both “hard” skills (technical ability) and “soft” skills (leadership ability). Strive for excellence.
“A lot of that, first begins with self-mastery — how are you managing your time, your relationships, your own learning agenda? — so that you’re bringing something of value to every single assignment that you have,” Klamar says.
“I think often in the family business world, we immediately go toward the relationship part of things. We forget that real skill, real value creation, is the thing we’re looking for, first and foremost. Developing that is key.
“Young women — and young men — have to build networks for learning, for advice, outside of the family and outside of the company. I believe you have to be very deliberate about that. Seek out external perspective and external experience, so that you understand your skills and your value outside of your family relationships.”
2. Ask the older generation for guidance. Ask questions about your family business and the prerequisites for leadership positions in the company.
Cowles advises her family’s NextGens to “listen and watch.” She explains, “Wherever you are, if you’re in a class or at a meeting, watch the leader, and [notice] what’s working and what isn’t working. Take away something about what that person was doing that’s either positive or negative. That will give you ideas for development of your own personal leadership style.”
3. Master the skill of responsible risk taking. Because so much of a leader’s role involves taking risks, it’s important to learn how to do so responsibly and to become comfortable with risk management. Cowles’ suggestion for young people looking to get their feet wet: “Just step out there, even if you’re not quite sure how you’re going to handle the situation or handle a leadership role or a project. Diving in and learning from those experiences is invaluable.”
4. Learn to manage your emotions. Working with your family exposes you to stress related to family relationships as well as business pressures.
“It’s important to understand what your triggers are,” says Susan Remmer Ryzewic, president and CEO of her family enterprise, EHR Investments, and director of The Remmer Family Foundation Inc.
“A lot of times, when things are said, you’re reacting because of something that happened, five 10, 15, 20 years ago, or a pattern in the family. You have to let those things go.”
Remmer Ryzewic developed a strategy for keeping calm in such situations. “People can ask me questions or make a point whenever they want to, but that doesn’t mean that I have to respond at that point in time.”
Instead, she tells the other party she heard what they said and promises to get back to them later. That gives her the space to think about why the comment upset her. What “hat” (family, ownership or management) was she wearing when the emotional trigger occurred? Was there any validity to the person’s comment?
“You have to not take everything personally,” Remmer Ryzewic says. Learn how to respond appropriately and not “overrespond,” she advises. — Barbara Spector
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