Myth or Reality: The glass ceiling – intact, cracked or shattered?

Thanks to new FFI Fellow Sofie Lerut for her article Myth or Reality: The glass ceiling – intact, cracked or shattered?.

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Some facts.

Over the past decades, a lot has been written about gender balance in decision making positions or, rather, the persistent lack of such balance. The fact is, indeed, that women are still strongly outnumbered by men in leadership positions in the corporate sector, even though:

• A majority of new university graduates are female. Therefore, not taking advantage of the skills of highly qualified women constitutes an important waste of talent and potential;
• Numerous studies consistently demonstrate that more gender-balanced leadership teams entail richer decision-making and more cohesion and correlate with better organisational, financial and all-round performance;
• Regulatory and market forces adopt measures stimulating, or in some instances imposing, increased gender diversity in, among others, boards of directors.

A few recent facts and figures give a rough sketch of the situation:

• The European Commission concluded in January 2015^[1] that none of the EU Member States comes anywhere near the gender balance zone regarding the representation of men and women on the boards of large listed companies in the EU. In only four out of twenty-eight Member States, do women account for at least a quarter of the board members. When looking at top executive positions, the reality is even more extreme: only 3.3% of those large listed EU companies has a woman CEO.
• The numbers resulting from surveys in the United States are comparable to those of the EU: only 16% of S&P 1500 board seats are held by women and only 4% of these companies has a woman CEO^[2].

Things are moving forward, but tardily.

But now for some optimism! It appears that family businesses worldwide are pacesetters in the evolution towards more gender-balanced leadership. A recent EY report^[3] based on survey results gathered from 525 of the world’s largest, longest-lasting family businesses contained some remarkable conclusions: in these family businesses, women are moving further and doing so faster than in their non-family counterparts.

The authors of this report suggest that inherent traits of successful family businesses create an environment that stimulates women on their path to leadership: the focus on long-term sustainability and growth and an inclusive environment emphasizing cohesion and commitment of family members as well as employees towards each other and towards the business. In addition, the presence of role models demonstrates the possibility of women moving up the ranks and assuming leadership positions.

These elements have a positive impact on the involvement of women, both family members and non-family members, on the highest levels throughout these family businesses. According to the survey, the more women there are at the top levels, the more willing family businesses are to consider a woman for CEO and to groom women for key roles, and the more motivated other female family members are to join the business.

How can family business advisors contribute to this favourable evolution?

First of all, family business advisors can and should help family members look beyond stereotypical assumptions that they might make, e.g., the father taking for granted that his son will be his successor, or the daughter assuming that her brother will take over. Our primary role as advisors is to help clients examine and discuss all options, not only the options they had in mind.

Secondly, family business advisors should acknowledge, and help clients acknowledge, the differences between genders and the opportunities these differences may entail. For example (and of course generalizing):

• Women attach great importance to (informal) consultation;
• They are more risk-averse and therefore tend to take things into consideration for a longer time;
• They tend to be less self-confident than men and they struggle – more than men – with work-life balance issues^[4].

The first two differences are obviously the kind of elements that, in gender-balanced leadership teams, may contribute to cohesion and even better, to more mature decision-taking. In general, it is not all that difficult to convince clients of the enriching nature of these characteristics.

The issue of self-confidence is essential: family business advisors should encourage female family members who show an interest in joining the family business to be explicit about their interest, to demonstrate their skills, to engage in specific training when needed, and to take up leadership challenges.

The last difference mentioned above – the impact on women of work-life balance issues – is, in our experience, viewed as an important issue by the generation that is currently planning its succession. However, this issue may be or become less gender-distinguishing than it once was: generation Y (both men and women) prefers flexible working schedules and a more stable work-life balance. Family business advisors may help the older generation understand that this is not a commitment issue: the millennials merely view life differently, mostly after being confronted all their lives with overworked parents, and want to find the optimal blend of an enjoyable life with a fulfilling working environment^[5]. This may lead to new patterns and dynamics, and a new approach to certain roles.

The advisor’s goal in this matter should be to help family businesses reach the point where the notorious glass ceiling is nothing more than a myth of the past, and where family business leaders looking for successors focus on the essentials: competence, passion and perseverance.

^[1] European Commission report “Gender balance on corporate boards – Europe is cracking the glass ceiling”, January 2015.

^[2] “Women on US boards: what are we seeing?”, EY Center for Board Matters, February 2015.

^[3] “Women in leadership. The family business advantage. Special report based on a global survey of the world’s largest family businesses”, EY – Family Business Center of Excellence.

^[4] These are some of the issues discussed during the annual “Family Business Day” organised by the Belgian IFB (Institute for Family Businesses) in May 2011, broaching the subject of women in family businesses.

^[5] This subject was examined during the “Family Business Day” organised by the Belgian IFB (Institute for Family Businesses) in October 2014.

About the contributor

Sofie Lerut is a member of the Instituut voor het Familiebedrijf (an organizational member of FFI) as well as a member of the corporate and securities practice at the Belgian law firm, Eubelius. Her family business focus is on issues such as succession, governance and the structuring of ownership. She will become an FFI Fellow on October 23, during the annual global conference in London. Sofie can be reached at sofie.lerut@eubelius.com