Women are increasingly taking the lead in family businesses, here’s how they are achieving it
11th Jul 2021
Mairead Harbron, Director of Private Client Services with PwC, sits down with Jillian Bolger and shares her expertise on tackling the challenges facing women in succession and leadership in family businesses.
As Director of Private Client Services at PwC Ireland, Mairead has rich insight into the complex world of family businesses.
Different from publicly owned companies, she’s acutely aware of the challenges and rewards across everything from tax and succession planning to structuring ownership of investments and property transactions.
Barriers to scale
The path to female leadership in family businesses is often beset with obstacles, and Mairead first looks to our culture. “Some barriers come from tradition, such as the first-born son inheriting the business.
“They are often mentored or supported towards leadership from childhood and given roles, both in the family and also in the family business, that position them for future leadership roles. So while the barrier starts unconsciously, it can sometimes be too late when it’s recognised.”
Mairead relishes the opportunity to support women in managing their growth and achieving leadership within their family business, and is pleased to report that change is happening.
“From a societal perspective, women now have greater participation in the workplace and are adding value in the workplace. Statistically, as a woman, you’re more likely to go to third level education too, so education, where once a barrier, is no longer.”
She points to the possibility that unconscious bias can be overcome too. “All of the studies and lived experience prove that having more diverse leadership leads to better business outcomes. It’s widely accepted that by having a diverse board, you have diverse views coming into it, which delivers better business outcomes.”
There are many strengths to being in a family business, with everybody heavily invested in what they do and caring about the community around them, but there are also some idiosyncratic drawbacks.
“Often there isn’t a clear divide between work and family relationships,” she explains. “This can impact somebody trying to make upward career moves with siblings in the mix. It’s a different dynamic in a family business versus a publicly owned business where you don’t have that same ownership and employee divide.”
Family harmony can’t be taken for granted and PwC helps its private clients to build a governance structure that will protect everyone’s interests. “Instead of leaving everything to be very informal, with disputes settled amongst the family in whatever power dynamic happens to be there at that particular time, you’re instead trying to take some of that emotion out of it.”
Family business can be an emotional space, and Mairead knows that clear cut policies ensure transparency and clarity when questions arise: Who should be rewarded from the business? What do you have to do to be promoted? What are the rules and performance criteria?
“And, for non-active people in the business too,” she emphasises. “What’s the dividend policy, for example? Without those rules, there is a greater chance of conflict.”
Succession management and planning
A succession plan and a will are key elements in any private business. “If you don’t have a will in place, you’re leaving it up to the Succession Act to decide where the business goes and in what direction,” she warns.
“If you have a very clear cut succession plan it avoids that conflict and people can buy into it over time. It can be very difficult for people to deal with grief, and also deal with this conundrum of what happens next in the business. I think it’s really important to have agreed plans in place.”
Studies looking at performance appraisal between genders reveal that objective criteria is essential for succession planning with a private business. “Rather than reaching a subjective decision over whether somebody has met the performance criteria, it needs to be as objective as possible.” Mairead explains.
“This will help in deciding who is the best leader for the business in the future. It takes the subjectivity out of it and means that the best person, regardless of gender – and maybe the male candidate is the best one, when you look through it – is identified to take over the business at the top.”
Reaching your potential
Historically, women in family businesses have played very important roles, but these have largely been in unpaid, invisible or informal roles. Mairead believes that visibility is key in helping the dynamic to shift and is keen to address the perception that if a woman puts her head down and works really hard, she will do really well in her career.
“I think that works up to a certain point. But for women trying to achieve leadership roles, they need to actively make sure that their efforts are being recognised and vocalise the work that they’re doing.” She also encourages women to fight imposter syndrome as much as possible, have confidence in themselves and be comfortable learning on the job.
“Be curious, ask as many questions as you can to continue improving your knowledge base. Reaching your potential requires openness to challenging opportunities, how else can we expect to learn and grow?”
Female role models
Mairead notes that women are being more encouraged, thanks, in no small part, to the visibility of more female role models. “The tide is turning, but there’s still more work to be done and it is a two-way street. Whether in family business or the wider context of women in business, we need to ensure that women are encouraged to secure senior leadership positions and are properly mentored to do so.”
But how can family businesses ensure the space is more welcoming for women? “Awareness of barriers and consciously dealing with those are key. I’ve seen clients bring experienced females from outside onto their board to create a bit of a trickle-down effect. Once that role model is there as a leader, women throughout the rest of the organisation more readily see themselves growing into leadership roles.”
She sees the benefits of outside perspectives, and recommends that everyone in a family business, male or female, undertake work experience outside of their business. “That way, they’re bringing a different perspective to the table, giving themselves an advantage and bringing added value.”
Mentors can play a big part in empowering and supporting women on their journey too. “Sometimes additional effort is needed to help women to identify formal mentors as well as informal mentors. Studies show that mentoring opportunities arise more naturally for men, so businesses can counter that bias by putting some formal mentoring in place.
“In a family business context that might mean that one mentor might be somebody within the family, but it would also mean people from outside the family, to get that kind of outside perspective and to help encourage their mentee and give them career advice as they’re going on.”
PwC Ireland is dedicated to helping Private and Family Businesses manage their ownership and growth today and define their legacy for tomorrow. To find out more about how they can support your business, log on here.