Women in Family Firms

The UK's biggest private businesses now have fewer female CEOs than the FTSE 100. Why?

When it comes to their wealth, families are less sexist than they used to be. But when it in their businesses they still prefer men in top management roles.

Do business-owning families have a problem with women? In their own families, the answer seems to be: less than in the past.

Recent research by Coutts, a British private bank famous for working with royalty and the landed gentry, found that just 3% of wealthy respondents would pass their wealth to the next generation based on primogeniture.

(The sample was 270 people with liquid assets of more than £1m, plus 120 with liquid assets of more than £5m).

 

How do families plan to divide their estate?

Source: Coutts. Breaking the wealth taboo: making succession a success

Forty-six percent of respondents said that they decided to divide their wealth equally between the members of the next generation. Others said they would pass on wealth according to their levels of involvement in the businesses, or using other principles (which could, in theory, hide any amount of sexism.)

But still, the decline of primogeniture and the rise of equality is undeniable.

What about when it comes to senior employees, though? In the past year, the female CEOs at four of the UK’s biggest family-owned firms have stepped down. They are:

  • Stella David, of drinks firm William Grant & Sons

  • Melissa Potter, of the Clarks shoes business

  • Anna Stewart, of engineering firm Laing O’Rourke

  • Lindsey Pownall, of food manufacturer Samworth Brothers

All were replaced by men. The departure of these four women now means that the UK’s 100 biggest privately-owned firms now have fewer female bosses - five - than the FTSE 100, which has six.

There is a lot of evidence to suggest that the more women a business has in senior positions, the better it will perform. A lot of it can be found in this Credit Suisse report. As a taster, here is one graphic they created which shows that the stock market performance of large businesses increases as the percentage of women in senior roles increases.

Performance of companies tiered by female management participation

Source: Credit Suisse CSG 3000

Source: Credit Suisse CSG 3000

 

Oddly, given the decline of primogeniture and the barrage of evidence showing that promoting women is a good idea, some family businesses are even reluctant to promote their own female family members to the top jobs.

That only six FTSE 100 firms have female CEOs shows that the world of British business is still very conservative. Large institutional shareholders with dinosaur attitudes might shoulder some of the blame.

But it is a shame that even in family-owned businesses, whose owners have more discretion to look beyond grey-haired men in grey suits, fear of change still rules.

© Business Family