COUTTS RESEARCH SHOWS WOMEN 50% MORE LIKELY TO BREAK GLASS CEILING IN A FAMILY BUSINESS

  • CEO/MD, Non-exec Director and Finance Director most popular roles
  • Family businesses also show more ‘human’ traits
  • Bank launches ‘Coutts Prize for Family Business’

Research released today by private bank Coutts & Co, shows that women are 50% more likely to achieve board level success in their careers, within family businesses.

The figures, released to coincide with the launch of Coutts’ new proposition for family business owners, showed that 62% of the family businesses surveyed have women on their board of directors, compared to just 42% of non-family businesses. Of these family businesses, 21% had female board members holding a non-executive director role and 12% had women taking on a CEO/Managing Director position. The research surveyed almost 300* family and non-family businesses with a turnover exceeding £1m per annum and is believed to be one of the largest studies of its kind undertaken.

The research also showed that family businesses are more likely to have a greater emphasis on ‘human’ traits in the way the business is run, citing low staff turnover and social responsibility as greater indicators of success than achieving commercial goals.** These same elements were considered to be more important when deciding upon business strategy, as was financing current lifestyles. The family businesses surveyed also indicated on average 1.4 years longer continuous growth in pre-tax profits in comparison to their non-family business counterparts.

Mark Evans, head of family business at Coutts commented: "These figures suggest that women are starting to influence and change the way family businesses are managed. Not enough has been written about the unique contributions of women in UK family businesses. While some may believe that women are brought into family businesses for reasons of share ownership and tax, it is clear that they can make a valuable and different contribution to the way businesses are run. The time has come to explore the invisible role that wives and daughters have been performing for a long time now."

Professor Nigel Nicholson of the London Business School, who participated in the research, added: "Family businesses are creating diversity and a broader set of leadership skills by including women leaders in the top management teams. The fact that family businesses do this to a greater extent than non-family firms could be because they have access to talented women through different networks. It may also be a sign that the traditionally 'invisible' influence of women in family firms has always been there but is now beginning to take a modern shape: as officially recognised positions of leadership."

The research also showed that:

  • Family businesses are more than twice as likely not to separate the key roles of chairman and chief executive
  • Family businesses have serious concerns over passing their business to the next generation
  • 22% of family businesses did not consider it important to ask the next generation if they want to go into the business
  • 67% felt that the next generation should be independently assessed for leadership potential first
  • Lack of communication, inability to remove incompetent family members, succession planning, sibling rivalry and in-laws are all cited as major causes of conflict

Mark Evans added: "Too many next generation family members are tempted to join the family business because they inherit it rather than because they enjoy it, or have any demonstrable management ability. Getting experience of working outside the family business first, can be good proving ground. It can also help a next generation family member decide a longer term career path and open new skills that can be brought into the family business."

Coutts’ new proposition has built on its 300-years’ expertise in looking after some of Britain’s most successful family businesses and packages together a number of private and commercial banking services, with specific product launches planned for 2006.

The proposition also includes an education and networking programme for family business owners across England and Wales, which launches in Cambridge on 20th September and allows both current and future generations to learn how to overcome some of the challenges they may face.

This is then complemented by the launch of the Coutts Prize for Family Business, for which the nomination process begins this month. This will comprise of four UK regional heats and culminate in a national final in June.

ENDS

For further media information on Coutts contact:

Claire Symonds, Regional PR Manager, Coutts & Co on 0207 957 2650 or mobile 07970001149 or e-mail claire.symonds@coutts.com

NOTES TO EDITORS

Family Business Survey

  • * 293 businesses were surveyed. Of these 149 were family businesses and 144 non-family businesses.
  • ** Indicators of success – Low staff turnover +10% differential, social responsibility +9%, defined commercial goals –6%. Planning business strategy – Low staff turnover +15%, social responsibility +5%, defined commercial goals –9%, financing lifestyle +13%.
  • Other contributors to the family business survey were: The Association of Family Business Advisors, BDO Centre for Family Business, Cavendish Corporate Finance, Change Partnership, Directorbank, Family Business Solutions, Hakan Hillerstrom, Institute of Directors, International Centre for Families in Business, Knight Frank, Malinski & Co Ltd, Manchester Business School, New Philanthropy Capital, Oxford Said Business School, Penningtons Solicitors
  • Telephone interviews were conducted by DVL Smith on Coutts’ behalf with directors and/or shareholders of 293 UK companies. 51% of these were family owned and 49% were not. 55% of the sample were 1st generation family businesses, 32% second generation and 9% third or more.

Coutts

  • Coutts is the international private banking arm of The Royal Bank of Scotland Group. The Royal Bank of Scotland Group is one of the world's largest banking groups.
  • Coutts manages the wealth of 98,000 high net worth clients worldwide through a network of 40 offices globally.
  • Coutts offers clients a range of products and services covering sophisticated investment products together with expertise in trust and fiduciary services and UK tax and banking services.
  • Coutts & Co is authorised and regulated by the Financial Services Authority. Registered in England No. 36695. Registered office: 440 Strand, London, WC2R 0QS
  • Calls may be recorded