Daughters over-looked as successor for family business

A new study from Jönköping International Business School (JIBS) has uncovered that its far more common for sons to take over the family business than daughters. It can take daughters on average 4-5 years longer than their brothers to reach the CEO position. However, another tentative but important finding in the study suggests that the family business actually does better under the leadership of a daughter than a son.

The study, Generationsskifte i familjeföretag i Sverige (Generational change in family businesses in Sweden) was carried out by researchers at the Centre for Family Entrepreneurship and Ownership (CeFEO) at JIBS.

The researchers selected around 8000 companies from the register of family businesses (all of them limited liability corporations) that were joint owned by parents who had at least one daughter and one son. The businesses ranged from all over Sweden and of all types of industries.

Of these 8000 firms, 360 were seen to have passed on the business to either a son or daughter. The researchers saw that only 18% of the firms were passed on to a daughter.

“What we see clearly is that it’s far more common for sons to take over a family business than daughters. However, the data also suggests that if the mother is the CEO, then the succession is likely to be more equal in terms of gender,” says Lucia Naldi, Professor of Business Administration.

Another tentative but important finding in this study is that when the research group looked at like-for-like businesses and compared their financial performance after the succession of a son or a daughter, the data suggested that the business actually did better under the leadership of a daughter, than that of a son.

“We need to look at this a bit more, but the initial finding is very interesting. Based on other research carried out at CeFEO, we know that women prefer to get more qualifications and more experience before they go for the CEO position. This might explain why, once they are in the job, they perform better than their brother, and therefore so does the company,” says Lucia Naldi.

The study also reveals that it takes daughters on average four to five years longer than sons to reach a CEO position. But, explains Karin Hellerstedt, Associate Professor of Business Administration, once they are there, the daughters are often more accepted as CEO than women in similar positions in non-family firms.

“Previous research carried out at CeFEO has shown that female CEOs who take over a family business are more easily accepted and supported than their female counterparts in non-family businesses who often experience a bit of a backlash over their appointment. We think that the trust employees and stakeholders have in the parent owner is often transferred down to the children.”

It’s a fascinating beginning and there’s clearly lots more to be uncovered. But even this first project has an important message for family businesses – that there’s an established view of sons taking over the family business that needs to be questioned.

“Family business owners need to look at their daughters and see that there is more competence there than they give credit for,” concludes Karin Hellerstedt.

More information

Generationsskifte i familjeföretag i Sverige is a study carried out by CeFEO researchers Mohamed Genedy, Lucia Naldi, Mattias Nordqvist and Karin Hellerstedt.

The publication date for the study is to be announced shortly. A short paper of the study will be available for the Academy of Management conference in Seattle, USA, in August. The paper has been nominated for the conference's Best Paper Award.

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