Unique Challenges For Women In Family-Controlled Businesses

According to the Conway Center for Family Business, nearly a quarter of family-owned businesses are led by a female CEO, and nearly 60% of all family businesses have women in top management. However, female leaders often confront workplace bias and potential communication hurdles rooted in the family’s shared history. Similarly, dissent among family members frequently exists. These are certainly issues confronted by male leaders as well, but often more difficult to navigate for women even while they are acknowledged for their skills and talents.

Why is this so?

Throughout my over thirty years of working with women leaders in family business, and as a female family business owner myself, I have observed that women often naturally take on a caretaker role within both their family and company. As the peacekeeper, they tend to take family harmony personally and desire to keep family members happy and connected as a family unit. But we also know that driving the growth and longevity of any business is difficult, replete with ups and down and tough decisions. These two facets of female leadership in a family business setting create their own innate tensions.

And though the trend is starting to dissipate, in many families there may remain, often generationally driven, a difference in perspective between the roles that male and female members of the family should assume. For example, for one of my CEO clients, when his daughter was named as his successor, a role she was aptly qualified to assume, her uncles and male cousins in the business struggled with accepting her leadership. One of the key needs of the business was to effect meaningful change to position the company for growth, yet as the new CEO, she was questioned at every step along the way.

Unfortunately, these internal roadblocks delayed the necessary changes and lessened the probability of success. In another situation, we are working with a family that is dealing with the effects of an ownership structure where the father left a 51% ownership interest to his son and 49% to his daughter. The business has successfully transitioned to the second generation, and though they are doing well, the daughter can’t help but feel slighted by her dad. Today, the daughter works alongside her sister-in-law, who is now the majority shareholder after the sudden passing of her brother—a situation that neither the father, nor family, would have wanted.

The challenges for a woman leading a family business can come from many directions—both family and business—but there is no disputing the impact of family businesses on our global economy, or the importance of female leadership in that sphere.

According to the Conway Center for Family Business:

  • Family businesses account for 64% of U.S. gross domestic product, generate 62% of the country’s employment and account for over 78% of all new job creation.
  • Conway describes family businesses as the backbone of America, representing the full spectrum from small businesses to 35% of the Fortune 500. The largest of which is Walmart.
  • Family businesses tend to take a longer-term perspective, have fewer human capital issues, drive entrepreneurial activity, and have higher firm values.
  • A key driver of success in family businesses is the connection and identity the owners and family member have with their business.

These same attributes that lead family businesses to be successful are directly correlated with the natural qualities of women as leaders.

Again, the Conway Center for Family Business provides the following:

  • 24% of family businesses are led by female CEOs.
  • 3% of recently surveyed family businesses indicated that the next successor is a female.
  • Over the past five years, women-owned family businesses have increased by 37%.
  • Female-owned family firms are typically 10 years younger than male-owned firms and most are first-generation businesses.
  • Female owned family firms experience greater family loyalty to the business, agreement with its goals, and pride in the business.
  • Women-owned family firms have a 40% lower rate of family member attrition in the business.
  • Women entrepreneurs achieve a higher percentage of growth than their male counterparts.

Simply put, women leadership in family businesses matters, and family businesses have become a bell weather by which other businesses are being judged. A recent survey by Ernst & Young of the 525 largest, longest lasting family businesses in the world indicate that these family led businesses are moving women further and doing so faster than their non-family counterparts.

Thinking through the key elements for success in family business—commitment to core family values, and business success across generations—it is not surprising that female leadership is increasing, and driving exceptional results for the families and business they lead.

I’m proud to be a part of this trend, and excited to see the business future it will lead to. Here’s to continued development of women leaders in family business and the promise this brings to all of us.



Name: Janice DiPietro
Author Bio: Dedicated to helping people and organizations succeed, Janice has successfully led and consulted to companies for over 25 years. She has experience in many diverse and complex industries, including technology, life sciences, and business services. Janice founded E.L.I. to channel that passion and experience in a powerful new way, bringing together an exceptional team of business veterans to guide organizations through their most critical transitions.  Janice holds an MBA and doctoral degree from Boston University and graduated summa cum laude from Bentley University with a BS in Accountancy. She also lecturers and publishes on a variety of business topics and serves as a board member for several profit and nonprofit organizations.
Exceptional Leaders International is a team of C-level executives dedicated to guiding our clients successfully through periods of growth and transition.  Whether our clients are seeking to expand, improve performance or effect a change in ownership, E.L.I Partners deliver solutions that solve their most challenging problems.
Link to social media or website: http://eliadvisors.com




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