Tag Archives: women

The Benefits of Women Leaders in Family Firms

David Ransburg
David Ransburg

Recently, the “Management Science” journal published a research paper about the impact of female leadership on the performance of family firms. Specifically, this article — “Gender Interactions Within the Family Firm” by Amore, Garofalo, and Minichilli – examined (1) the impact of replacing a male CEO with a female CEO and (2) the impact of increasing the percentage of female directors on a company’s Board.

According to the authors, replacing a male CEO with a female CEO slightly improves a family firm’s performance, and this slight improvement is magnified when the proportion of females on a company’s Board increases as well. They caution, though, that this magnification is less pronounced when (1) the firm is larger in size and (2) when the firm is located in geographic areas characterized by gender prejudices.

The authors suggest that the significant positive impact comes from the interaction between multiple females in prominent leadership positions of the same firm.

So, for those family businesses that are smaller in size and located in geographic areas that are free of gender prejudices, keep this in mind the next time you are making a change of CEO: a female candidate might lead your company to better performance than would a male…. especially if that female CEO is supported with some female Board members.

What do you think about this research? Is it consistent with your own personal experiences?

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Why I’m Seeking a Well-Qualified Female Board Member

Amy Schuman
Amy Schuman

Why would a client specifically ask to be presented with female director candidates? While writing this post, I asked the Board Chair of a large, fourth generation real estate business, why he was so keen on finding a female for his company’s next independent director. This is what he told me – with permission to share:

“I went to an all-male college, and had lots of experience in all-male environments. I’ve served on many boards over the years, and I’ve found that the presence of both genders enhances the contributions that all members of the body will make. Men seem to be more constructive with both men and women in the room.”

“I also think that there are points of view that are gender driven. There’s knowledge and sensitivities that differ between the genders. When you have only one gender, you don’t have a balanced perspective or balanced participation.”

“Because women are often the primary caregivers, they are more involved in the educational process and their sensitivities carry over into housing decisions. Men may not see those things. It’s not quite universal, but on the average, women bring different life experiences to the table.”

Research actually supports this view. There are plenty of studies to quote, but let’s look at just one post-2008 study conducted by Leeds University Business School. The study found that companies with at least one woman sitting on their Board of Directors had a greater chance of surviving the downturn than companies without any women on their boards.

There’s plenty of research on this subject, but this post is already pretty long so – take a look at these sites for more data on the advantage of board diversity:

http://www.20-first.com/

http://www.writemoneyinc.com/2011/08/25/women-making-waves-in-the-boardroom/#ixzz2JEVY5v5I

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Female Board Members

Amy Schuman
Amy Schuman

Why should it be difficult to find well-qualified females to serve as independent directors for family business boards? Very frequently we are specifically asked by clients to present them with female director candidates. (Why do they make this request? Stay tuned to this blog later this week.) Sadly, in several cases this request proved quite challenging. Why should this still be the case, after all the gains that women have made? In discussion with several FBCG colleagues, the following thoughts arose:

1. Chicken and Egg Problem: Families seeking independent directors usually want candidates who have experience on boards. Women often lack experience on for-profit boards, although they frequently have non-profit board experience. Families can be reluctant to give a woman her first chance to serve as a director, no matter how qualified.

2. Women Commonly Serve in Non-Operating Roles: Director candidates with experience as  CEO’s, Presidents or other operating leaders are most desirable. Many women concentrate their careers in HR, PR, Community Relations, etc. and are seen to bring less value to the board.

3. Women Still Lack Desired Experience: Direct experience with international expansion, successful innovation, strategic redirection, M&A etc. are highly sought after in board members, and women tend to be less likely to have those experiences.

Since women are often behind on the more traditional ‘leader’ front, families may need to be open to a different set of experiences in order to find strong female candidates. There are many well-qualified women with backgrounds in finance, HR, law, banking, consulting or education who could be great board members, even if they don’t fit the standard profile of a proven leader. That said they can be excellent strategic problem solvers.

What have you found as you seek well-qualified women as board members?

Later this week – why many families actively seek to find qualified women for their boards.

(Thanks to my colleagues, Stephanie Brun de Pontet and Jennifer Pendergast, co-authors with John L. Ward, of Building a Successful Family Business Board, for sharing their insights in this regard.) Top of Form

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Female Role Models

Amy Schuman
Amy Schuman

Recently a client was refurbishing his offices and he commissioned two sculptures for the lobby: One of Abraham Lincoln, and one of Winston Churchill. I happened to be in his offices when they were being installed, and he called me over to admire their beauty. They had been rendered by a local artist who had done a masterful job of capturing the inspirational spirit of both of these men.

“Got a question for you,” he said as he called me over. “I want to put a female in the lobby alongside these two men, and I’m having a tough time figuring out who to put here.”

We talked for awhile about what was making it so tough to identify the right woman to put in the lobby. Obviously, a female U.S. President was not a possibility. Margaret Thatcher, Indira Gandhi, Golda Meir all had served as heads of their states, all were inspirational and pioneering, but none seemed right to sit alongside Lincoln and Churchill.

I polled family and friends over the next few days for their ideas, and though many good ideas emerged, nothing has topped the charts as a clear winner. Eleanor Roosevelt, Susan B. Anthony, Jane Addams, Barbara Bush, Harriet Tubman, Amelia Earhart, Nancy Reagan, Marie Curie, Sacejawea, Madelyn Albright – none seemed right.

“What is it?” asked the client, a successful family business leader, who had grown his second generation business both in size and innovation. “Women’s contribution is clearly important, in family and society and business. Is it that women are more comfortable leading from the background? Is it that woman prefer to make their contribution in the home and schools, more quietly and away from the limelight”

We haven’t figured it out, but it was certainly an interesting discussion. And so, dear readers, I pose the question to you. What woman would you nominate to sit alongside Lincoln and Churchill in the lobby of this family business headquarters?

 

 

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