Monday 25th November, London: Family firms are still largely being handed down to sons rather than daughters, according to research(1) conducted by Cynergy Bank. While women are better represented at board level, compared with non-family firms, they are frequently overlooked for leadership roles.
Those who inherited their business did so mostly from their father or their grandfather with only around 20 per cent taking over from a female family member.
A generation on, similar attitudes remain. Only a quarter (24%) of family business owners strongly disagreed with the sentiment that ‘It’s only natural that family businesses pass onto male relatives’. One third agreed, with the rest undecided.
Remarkably 26 per cent of female business owners said that it was natural for businesses to be passed on to male relatives, though they are more inclined than men to consider passing the business onto a daughter or other female family member. This view is more prevalent among smaller enterprises.
There are signs of progress with almost half (45%) of family business owners claiming that the introduction of gender gap reporting has made them reconsider assumptions about gender and leadership.
Larger firms are more likely to have reconsidered their approach with almost three quarters indicating this to be the case. Younger family business owners are more alive to the dangers of gender bias than older owners.
Nevertheless, among those who intend to keep ownership of the company in the family, male relatives continue to be prioritised and are twice as likely to take over the business than females.
Forty-two per cent of those intending to keep the business within the family say they will hand over to a male relative compared with only 22% who expect a female to take the helm. Sectors traditionally thought of as masculine such as construction tend to be more inclined to pass ownership along the male line.
Nick Fahy, chief executive of Cynergy Bank, said: “Historically family businesses have overlooked female leadership talent and handed their businesses down to sons and nephews. It’s disappointing to see that this is still the case in 2019. Family businesses make a significant contribution to the communities in which they operate. It’s important they reflect these communities in their leadership. We frequently see ‘& Sons’ incorporated into the name of family firms. There are some ‘& Daughters’ out there, but they are few and far between.”
Cynergy Bank, a specialist lender with a focus on family firms, is launching its & Daughters campaign today.
“We’re raising awareness of the issue, but we also want to be part of the solution,” said Fahy. “That’s why we will be launching a £75m fund next year specifically for female-led family firms. The Cynergy Bank & Daughters Fund will launch early in 2020 and will be designed to help female-led family firms make the investment they need to grow.”
Amalia Brightley-Gillott, Managing Director of Family Business Place, a consultancy which supports leaders of family firms, said: “For many women, the window for taking over the reins of the family firm often coincides with the time when they want to start a family. Unfortunately, this can lead to them being overlooked. Instead of accommodating this within the succession plan, a brother or a male cousin is often primed for the role instead.
“More recently there has been a shift in the way we work and run businesses. Flexible hours, working on the go, working from home have all led to women being able to achieve their goals in business whilst also managing a family.
“The best business leaders know that, in order for the business to continue and succeed, everyone should have an equal opportunity based on merit, not gender. I would urge all family business leaders who are thinking about succession planning to focus on the best person for the job. This is when the most extraordinary, passionate, dedicated women have the opportunity to rise to the top and demonstrate they are the best leader for the business.”
Caroline Gourlay, Business Psychologist, said: These findings fit with the way our thought processes work. If we’re asked to imagine a nurse, for example, most of us will automatically picture a woman, even though about 11% of nurses are male. If we picture a business leader, most of us tend to think first of a man, particularly in a male-dominated industry like construction. It’s the default.
“If you’re going to do something different from the default path, you have to actively choose to do it rather than just let it happen automatically. Father to son is a well-worn path, which it takes conscious choice to move away from. The fact that gender pay gap reporting is getting people to think again shows the power of getting people to examine their automatic thought processes.
“The family business model is inherently quite traditional. When someone decides that their main aim is to keep the ownership and management of the business within the family, they’re demonstrating a different set of values from an entrepreneur who just wants to maximise financial return. They may be a little more inclined to subscribe to the kind of traditional family values that have rather prescribed gender roles.”
For more information contact
Steve Marinker, 07779 031 936
Chloe Retief, 020 7250 1446
About Cynergy Bank
Cynergy Bank is a specialist bank established in 2018 by entrepreneurs to serve the needs of business owners, property entrepreneurs and family businesses. At Cynergy Bank we recognise that our customers’ personal and professional lives often overlap. Our mission is to help empower them to achieve their ambitions by serving all their interdependent banking needs.
We provide a comprehensive range of products and services to meet the property finance, business and commercial banking, private banking and personal savings needs of our customers. With a track record in the UK dating back to 1955, we are committed to putting enduring relationships with our customers at the heart of what we do.
Cynergy Bank is a UK bank, authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Eligible deposits are protected up to a total of £85,000 by the UK Financial Services Compensation Scheme. Cynergy Bank was established following the acquisition of Bank of Cyprus UK by Cynergy Capital Limited in 2018.
For more information on Cynergy Bank visit www.cynergybank.co.uk
- Research conducted by Opinium Research for Cynergy Bank among 1008 SMEs. June/July 2019. A family business is defined as an SME which is run by two or more members of the same family or was started by relatives of the current owner. Research conducted among 1008 SMEs, of which 412 are run by two or more members of the same family and a further 131 involve other family members in non-management roles.