NEW YORK, June 19, 2015 /PRNewswire/ -- Family businesses naturally have a focus on inclusiveness, longevity, sustainability and growth, but one area setting these companies apart from other types of business organizations — and arguably helping to drive long-term success — is significant inclusion of women leaders. Family businesses are some of the largest and most durable in the global economy, having managed to remain innovative, flexible, focused and growing for decades, if not centuries. They have a higher percentage of women family and non-family members in the C-suite, in top management and on the board than other types of companies.
This commitment to advancing women was initially identified in an EY and Kennesaw State University report Staying power: how do family businesses create lasting success? It is explored further in a carve-out from the survey, which covers 25 of the largest family businesses in each of the 21 top global markets, called Women in leadership: the family business advantage. Those surveyed represent businesses that average $3.48b in sales and 12,000 employees.
Specifically, some of the significant findings about family businesses that underscore their inclusion of women include:
- They average about five women in the C-suite and four women being groomed for top leadership positions
- Women compose 22% of the average family business top management team
- 55% have at least one woman on their board
- Boards average 16% women — which is more than one woman per board
- 8% of their boards are 50% or more comprised of women
- 70% of family businesses are considering a woman for their next CEO, and 30% are strongly considering a woman for the top spot
When comparing these family businesses with overall global business statistics, the difference is striking. Women's participation in top management globally was 12.9% at the end of 2013, and the proportion of women CEOs worldwide was 3.9%.1 Continuing the comparison to the percentage of women on corporate boards, the difference is staggering, with the worldwide average board composition standing at 12.7% women at the end of 2013.2 It is imperative to note that family businesses are included in almost all of the global statistics about women in business, including these above. If the worldwide family business data were separated from the non-family businesses worldwide, the disparity would likely be even greater.
"Family businesses may offer a path forward for all businesses seeking to achieve gender parity within their leadership ranks," said Carrie Hall, EY Americas Family Business Leader. "Our analysis of this data suggests that inherent traits of successful family businesses contributing to their long-term success also create an environment that's more welcoming and conducive to the development of women leaders."
Supporting all women, not just family
The research shows that family businesses believe in the value of women in leadership overall, including women non-family members. Companies in the survey averaged just over one woman family member in a leadership position, but also averaged 3.5 women in the C-suite who were not family members. Additionally, these businesses said they were grooming an average of four women for a top leadership position — one family member and three non-family members.
The overall impact of women in management
The survey data also show that having more women being groomed for the C-suite leads to a business having higher growth targets, emphasizing their focus on long-term growth and sustainability of the business, rather than short-term performance goals, such as meeting quarterly numbers.
"These findings can lead us to reasonably surmise that having women in leadership is good for long-term, sustainable growth. And, a focus on long-term sustainable growth is a strategy that is a proven accelerator for women in leadership," said Joe Astrachan PhD, Professor of Management and Entrepreneurship, Kennesaw State University.
A formula for success
The study uncovered three catalysts for women in leadership, which many of the surveyed companies had in common:
- Role models. Family businesses that tend to have women in top leadership in the C-suite and on the board offer role models to less-senior women and clearly demonstrate that moving up the ranks and assuming leadership positions are possible.
- Long-term thinking. Family businesses tend to think in very long time horizons. This long-term thinking and longevity contribute to the erosion of conscious and unconscious bias, making space for women at the top.
- Inclusive environment. Family businesses balance the interests of the family with the needs of the business by emphasizing cohesiveness, inclusiveness and commitment to the well-being and wealth of the family and the family enterprise, including non-family employees. People — not just profits — matter. This is the kind of environment in which women thrive.
"Some of the largest, longest-lasting family businesses in the world are moving women farther and faster than their non-family counterparts," said Peter Englisch, EY Global and EMEIA Family Business Leader. "These businesses are the giants of the world economy, employing vast numbers of people, dominating industries, and impacting local and global economies. How they operate when it comes to valuing women leaders shows a different, more enduring and sustainable path forward for business and for the world economy as a whole."
Future insights on survey topics coming soon
Women in leadership: the family business advantage is the first in a series of in-depth explorations of the key topics covered by this survey. The future insights will delve more deeply into the data and will explore the differences of countries, regions and developed and emerging markets in each of the following topics:
- Succession
- Governance
- Communication and resolving conflicts
- Branding
- Corporate social responsibility, philanthropy and sustainability
- Cybersecurity
To view the full report, please visit ey.com/womenfamilybusiness.
About EY's Strategic Growth Markets practice
EY's worldwide Strategic Growth Markets Network is dedicated to serving the changing needs of high-growth companies. For more than 30 years, we've helped many of the world's most dynamic and ambitious companies grow into market leaders. Whether working with international, mid-cap companies or early stage, venture-backed businesses, our professionals draw upon their extensive experience, insight and global resources to help your business succeed.
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About EY's Family Business Services
EY is a market leader in advising and guiding family businesses. With almost a century of experience supporting the world's most entrepreneurial and innovative companies, we understand the unique challenges they face — and how to address them. We offer a personalized range of services aimed at the specific needs of each individual business — helping it to grow and succeed for generations. Our Family Business Global Center of Excellence is a powerful resource that provides access to our knowledge, insights and experience, connecting family business owners to their peers through the strength of our global network.
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About EY
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.
About the Cox Family Enterprise Center
Since 1987, the Cox Family Enterprise Center at Kennesaw State University has been dedicated to the education, recognition and research of family businesses. As one of the first university-based centers of its kind, the center remains focused on connecting people, ideas and knowledge to create a dynamic community to transform the family business ecosystem and further economic development.
coles.kennesaw.edu/familybusiness
About Kennesaw State University
Kennesaw State University is the third-largest university in Georgia, offering more than 100
undergraduate, graduate and doctoral degrees. A member of the University System of Georgia, Kennesaw State is a comprehensive university with more than 32,000 students from 130 countries. In January 2015, Kennesaw State and Southern Polytechnic State University consolidated to create one of the 50 largest public universities in the country.
kennesaw.edu
EY refers to the global organization and may refer to one or more of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.
This news release has been issued by Ernst & Young LLP, an EY member firm serving clients in the US.
1 The CS Gender 3000: Women in Senior Management, Credit Suisse Research Institute, September 2014; Catalyst censuses (Fortune 500 and FTSE 250), 2014.
2 Ibid.
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