“My daughter is not interested in the family business” is a phrase that is often heard. But is this an assumption, or have we actually checked? Women have long played key roles in family businesses, though not always visible. And daughters in the 21st century may suffer; feeling that they are not being invited to take part in the family business.
In 18th century Revolutionary France, Marguerite d’Hausen married Charles de Wendel, owner of the Wendel family forged iron business. When the French Revolution erupted in 1789, most of the family chose exile. But Marguerite, aged 69, stayed on to run the family business until she was arrested in 1794.
Her grandson, François de Wendel, bought the bankrupt forges in 1803 on return from exile and expanded throughout the Napoleonic wars. In 1825, when François died, he left ownership to his wife, Josephine de Fischer de Dicourt. Widowed at 41, she lived on 47 years more, managing the forges with her son and son-in-law at a time of railway development and steel ship building.
Employees exceeded 10,000 as new collieries opened and new forges were built. On her son’s death in 1870, Josephine, with no surviving children, created a partnership. Its first shareholders were Francois de Wendel’s nine surviving grandchildren who owned 100% of Wendel mines and forges.
Shares could only be owned by Wendel’s descendants and this has survived numerous crises and remains the basis for the family business today. This extraordinary story is not isolated: several women have played important leadership roles in family business dynasties such as the Haniels and Krupps in Germany, de Dietrich in France, or the renowned Veuve Clicquot in Champagne.
It should, however, be noted that they accessed power as widows – ensuring the transition from their deceased husband to the next generation, and sometimes staying at the helm for many years. In contrast with Marguerite and Josephine, the majority of women who married into business families played, until recently, hidden roles.
They kept the books and their opinion on recruitment and suitable associates was sought. They organised social events for the key stakeholders of the business, hence developing the firm’s social capital, its network of relations, allies and resources. Grandmothers, mothers and aunts played an important role linking family members with the next generation.
They transmitted family values to the children and taught family members how to get along, both in and out of the business. They were its “Chief Emotional Officers”.
Daughters, in the past, were usually not considered for the business. They were expected to marry and their contribution, in some countries, consisted in bringing the right husbands to the family business – another way of recruiting talent. In many families, daughters were given money or real estate as their heritage, while sons were given shares.
When daughters received shares, it was usually in much smaller proportion than their brothers. This was the norm until a generation ago. It linked ownership to management and protected daughters from business downturns. The traditional shares for boys and other assets for girls, has important consequences on the family business.
It entails taking capital out of the business to ensure daughters’ inheritance, and limiting the family talent pool to boys and their male successors. Another consequence that many family firms experience in Europe is the feeling of exclusion expressed by daughters’ descendants.
Traditions change and we see more and more daughters succeeding fathers or uncles as CEOs of family businesses. One highly visible example is Marilyn Carlson Nelson, who headed the Carlson Companies founded by her father in the USA and employing 150,000 people. During her tenure, women in executive posts increased from 5 to 40 percent.
Overwhelmingly, women still remain the “family glue”, but this is changing too. In large third generation ownership families, men sometimes play that role. Not all women should, or want to become executives, but fairness requires at least checking first, otherwise that would be a denial of choice.
Families in which such issues remain buried, rather than being discussed and translated into decisions that can be accepted by all, run greater risks of dissent. Winning enterprises must recruit as widely as possible from pools of talent. In family firms, new businesses or subsidiaries are often entrusted to family members.
Rapid growth can quickly outstrip possibilities of executive staffing through male offspring only… and research suggests that succession is often easier from father to daughter.
|American Family Business Survey||1997||2002||2007|
|The present CEO is a woman||4.7%||9.5%||24%|
|The next CEO could be a woman||25.4%||34%||34%|
|At least one woman in the family is employed full-time||40.9%||52.4%||52%|
|% of women among the family employees||19.2%||26.6%||40%|
Source: American Family Business Surveys, 1997, 2002, 2007