In March, the United States celebrates Women's History Month with exhibits, scholarship and events at the Smithsonian Institution, the Library of Congress, the National Archives and other federal institutions. On Aug. 26, the country will mark a milestone in women's history: the 100th anniversary of the 19th Amendment to the Constitution, which gave women the right to vote.
In this edition of Family Business, we examine women's ascent to leadership in family businesses. Since the days of Estée Lauder, women have proved they can lead a family firm and grow it to market dominance. Despite such successes, many families traditionally relegated their female members to informal roles and denied them the opportunity to contribute to the business.
This mindset persisted into the 21st century. In their 2008 book Family Wars, U.K. family business advisers Grant Gordon and Nigel Nicholson wrote, “It is well known in family business that women often occupy a subtle but determining role behind the scenes — sometimes as ‘Chief Emotional Officer,' over the dining room table or on the conjugal pillow, gently but firmly nudging the minds and moves of the chief actors.”
While some women embraced the “chief emotional officer” role, others found it demeaning. It's now widely acknowledged that a family governance structure, such as a family council, is a productive way to manage family issues. Several families retain the “chief emotional officer” title, formally or informally, but most use other designations for family leaders, who are often elected to governance posts. The establishment of family governance signals that disputes will be resolved by a diverse group of family members in a transparent process, rather than by “Mom” whispering to “Dad.”
Many families have developed employment policies stipulating that jobs in the family business will be offered based on merit rather than family status. Such policies may have enabled qualified women to join their family firms, but statistics show it's still primarily the men who become CEO or chairman.
Age may be a factor in the persistence of the patriarchy. Family business leaders and board members are notoriously long-tenured. It's possible that women will get more chances to step up when the older men step down.
Studies indicate that women who become CEOs of their family businesses may well be the type of leaders millennial employees want to work for. A 2019 survey of more than 1,830 global family businesses by academic researchers, known as the Successful Transgenerational Entrepreneurial Practices (STEP) Project, found that family businesses led by female CEOs are less autocratic than those with male CEOs. Research by Great Place to Work, an analytics and consulting firm, determined that millennials prefer inclusive leadership that gives employees more flexibility.
For a report in this issue, I asked about a half-dozen highly accomplished female family business owners for recommendations on developing young women for leadership in family firms. One key suggestion that emerged: Encourage all NextGens to engage with the business and give qualified women their due. Allow the women in your family to reach their full potential.
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