"For any business to thrive and prosper, it needs a balance of men and women. Now's the time for family firms to seize the opportunity."
Like every year, International Women’s Day 2019 has refocused attention on the business benefits of having a gender-balanced workforce. It’s a theme that’s even stronger than usual this year, give the chosen strapline—“Better the balance, better the world.”
For me, this message sprang to mind recently when I was reading the detailed findings from our PwC Global Family Business Survey 2018. Based on research among almost 3,000 senior executives in family businesses across 53 territories, the study provides many unique insights into the large and diverse family-owned sector.
Looking across the survey results, I was especially struck by the findings on gender. At first sight, they make grim reading.
Why? Here are a few headlines. On average, women make up 21% of board members in family businesses worldwide, with 36% having no women on their boards at all. Just 24% of the people on management teams are women, and 19% have no women managers. One in seven—14%—have no women on the board and no female managers.
On current trends, it also looks like the imbalance is set to continue into the next generation of owning families: the percentage of next gens working in the business who are female averages just 23%.
So far, so disappointing. But a closer look reveals some interesting nuances. For example, first-generation businesses tend to have more women on their management teams, at 28%—and smaller-turnover firms have a higher proportion of female next gens working in them. So it seems the gender balance is better in newer businesses.
Our study also reveals a strong commitment to promoting diversity. Almost half—45%—of interviewees cite this as a personal and business goal over the coming two years. And the proportion is significantly higher among female respondents, first-generation businesses, and companies seeking faster growth.
In my view, the correlation with higher growth is no coincidence. While it’s important for any corporation to have good female representation at management levels, it’s even more vital for family businesses, for several reasons.
One is the fierce war for talent that family businesses face. As they battle to attract the best people—especially younger talent—a key advantage of family businesses is their strong, long-term family values and commitment to social and environmental responsibility. These attractive qualities are strengthened by demonstrably supporting United Nations (UN) Sustainable Development Goal 5 on gender equality.
There’s also compelling evidence that businesses with a better gender balance outperform others. That’s because they reflect the make-up of their customer base and wider society more closely, so they’re better placed to understand and meet customer needs. Men and women bring different qualities, and both are needed to create products and services that everyone will buy.
Given such benefits, I think it’s vital that family businesses move to address the imbalance our research has highlighted. But how? The first step is to truly embrace the importance of gender balance. This means actively seeking and considering women who will be the best candidate for any role.
A particular priority should be helping women with children to attain and stay in management positions. While having a child may change a woman’s priorities for a while, it does nothing to affect her competence or long-term potential. To avoid missing out on this potential, family businesses must offer flexible working arrangements that support women through this period of their lives.
Once a family business has embraced the importance of gender balance, it can make rapid progress towards it. Even a wide gender gap can be closed quite quickly. By way of example, take PwC Netherlands: a year ago, our management board consisted of six people including one woman. This year it’s seven people, including three women.
The message is clear. For any business to thrive and prosper, it needs a balance of men and women. Now’s the time for family firms to seize the opportunity.