©julief514/ISTOCK/THINKSTOCK
As we reflect back on Women’s History Month, businesses, governments, NGOs, and media alike have underscored the integral role women play in the current and future workforce. Additionally, when it comes to American family-owned firms, this dynamic is also changing quickly.
Family businesses are a cornerstone of the American economy. They represent our history of championing visionary thinkers with an innovative spirit. While just 10 percent of respondents to our latest U.S. Family Business Survey were women –reflective of the number of women now leading U.S. family firms – we believe that number will grow, and grow quickly.
More and more, family businesses are beginning to find that by tapping women to be part of leadership, they can advance their business and support American economic growth. We’ve been seeing evidence of this recognition with companies increasingly considering women in their succession plans, in their board appointments and in cultivating female talent within their own families.
Changing tides in succession
Baby boomer owners of private businesses are approaching retirement. As leaders, they must transfer the business to the next generation – within the family or not – and this process continues to be complex and challenging. According to our survey, three in four younger companies think that men and women in the next generation will be considered equally for leadership positions when it comes to succession planning. Not so of companies three generations or older — just slightly more than half of them say they’ll give men and women an equal shot at top roles. But we predict that these numbers will increase. With even more women set to enter the workforce in future generations, leaving this resource untouched will only deter companies’ progress.
More diverse corporate governance
We know that the more diverse minds you have at the table, the more likely you are to find strong solutions to problems, reach better outcomes and ultimately, grow your business. According to our recent study on board composition trends, 91 percent of directors say diversity enhances board effectiveness, and 84 percent say the same leads to stronger company performance. While the study only looked at gender diversity on boards, we believe that this is a good indicator of the efforts some boards are making to become more diverse overall.
Additionally, governance at family firms benefits from adding more women to their boards, with research finding that companies generally have a greater focus on corporate governance if they have more women in leadership roles.
Cultivating Gen2
There’s a major gap to fill when it comes to gender diversity in family business succession. We’ve seen firsthand that family firms can successfully make this connection: Amy’s Kitchen, an organic food business started by Rachel and Andy Berliner, has achieved great success by corning a space of high demand for organic, gourmet food easily accessible at grocery stores in the U.S. Today, they employ over 2,500 staff and have more than 230 products on the market with multiple production facilities across the globe. Their daughter Amy, the now 30-year-old company’s namesake, is committed to keeping the business family owned, and plans to take the reigns as the next generation owner. Family firms truly are in a unique position to cultivate female leadership by encouraging female family members, early and often, to take an interest in the business.
All signs point to the rise of women’s voice and leadership in family firms. We see American family businesses recognizing the untapped potential of women in succession plans, board and leadership positions, and the next generation of female leadership in their families. This can be an opportunity for all American family firms to elevate their businesses even further for future generations.
Jonathan Flack is US Family Business Services Leader and Partner in PwC’s Private Company Services Practice. Renee Klein is a Tax Partner in PwC’s Private Company Services Practice