The days of male-line primogeniture (where the eldest son inherits the entire estate) are waning, as a result of generational shifts in attitudes, and simple demographics.
While older generations hold a patriarchal view of wealth, only a third of their children held such views. More often than not, women outlive their husbands, and rather than family wealth passing to the next generation, many widows have stepped into positions of control. Divorce has also been a driver of an increase in women’s control of wealth – in the USA, women control more than 60% of personal wealth. Women family leaders, regardless of age, are challenging traditional gender roles.
The industry is slowly adapting to these changes. There are initiatives to help women find their voices and become more active participants in both family wealth and family operating businesses.
Women want to work with advisors who will empower them to make their own decisions. They demand that their advisors take the time to understand all aspects of the family enterprise. This is not limited to wealth structures and their financial implications – of particular importance is the family and its dynamics that the wealth supports.
The more valued advisors were the ones who proactively worked in terms of shared understanding and decision-making for male and female family members. Advisory firms are adapting to this and learning how better to engage with female family members, to respect them and the important roles they play.
Within the family business, there is progress, but still, a way to go. A 2021 study showed that entrepreneurial families often prepare their daughters and sons differently for their careers. Daughters receive little to no incentive to develop the leadership skills and entrepreneurial passion required to contribute to the family firm or start their own businesses.
Unlike larger corporations, family businesses are in a unique position to play a role in helping break glass ceilings that perpetuate gender roles. They can ask challenging questions about the proportion of women involved in the family business and can make changes to increase representation. Women in leadership roles in family businesses are seen as role models both to less-senior women and young female members of the family.
Because they take a long-term view of family and business, they can be more active in preparing daughters to assume operational and leadership roles within the enterprise. Talking about the business with all the children, encouraging their interest and providing mentors can help unlock talent that previously was overlooked within the family.
The advantages of having women involved in decision-making are well established – a diversity of opinions and perspectives leads to better decision-making. In particular, when it comes to family wealth, women often focus on the big picture and the whole family’s end goal instead of just the numbers.
This is also posted at [Family Business Association].
