Invisible Daughters in Family Businesses

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A recent post on LinkedIn caught our attention: “Women formerly sidelined in family businesses, now more successful.” The article features three daughters who are at the helm of their families’ companies, and the author hails the increase of daughter successors. While the success of these daughters (and many others) is certainly worth celebrating, there is still much work to do to end discrimination against daughters in family firms.

The Party Is Premature

How do we know that discrimination against daughters exists? There are no precise data on this demographic. However, the U. S. Bureau of Labor Statistics reports that only 19.9 percent of businesses were owned by women in 2018. This figure includes women who started their own businesses and wives who inherited businesses from their husbands. Thus, a fraction of the 19.9 percent of women business owners were daughter successors.

In 1994, 2 percent of businesses were owned by women. Again, only a portion of the 2 percent were daughter successors. While 1994 is almost a generation ago, this figure is relevant because women who entered the workforce at this time, or earlier, continue to experience the consequences of disparate opportunities within their families, as several scholarly studies suggest.

Research on the dearth of daughters in family businesses reveals that, under patriarchy, gender norms are communicated, consciously and unconsciously, at a young age, and brothers are typically accorded more power (such as decision-making) and more resources. Brothers are also treated as though they are the future leaders of their family’s business. Consequently, daughters are inadvertently discouraged from taking an interest in the business or preparing for leadership, as they do not envision themselves in that role. Research further indicates that daughters are blind to the opportunities that successors enjoy because they are not exposed to or informed of the advantages.

It's Not Business; It’s Personal

Unfortunately, for many daughters, the outcome of gender discrimination can be severe. Daughters have been crushed, demoralized, and estranged from their families. In addition, discrimination can result in significant financial loss.

While women everywhere face discrimination in business, there is one discerning factor that makes the experience of daughters of family business owners unique—the gatekeeper (usually the father) is their own parent. There is no separation between the head of the company and the guardian of their well-being.

Notably, laws that protect daughters from discrimination in businesses generally do not protect them within their family’s business. Ironically, the same fathers that discriminate against their daughters comply with equal opportunity laws by hiring other people’s daughters.

The Path Is Paved With Good Intentions

Discrimination against daughters does not mean that daughters are not loved by their parents. Usually, parents do not realize they are creating long-term inequality within their families. And these parents often believe that their sons’ leadership will serve to protect their daughters as well.

There are other forms of daughter discrimination that have not been examined by researchers. For example, some daughters have breached the gender barrier, and become successful leaders in their companies, only to be replaced or dismissed by their brothers.

More awareness and study of daughter discrimination in family businesses is needed. Here is a small sample of questions that research can illuminate:

• How does discrimination in family businesses affect daughters over the long term?
• How can parents who own businesses create more equality in their families?
• What happens when norms are disrupted, and a daughter is chosen to head the family business instead of her brother? How often does this happen?
• What happens when daughters demonstrate more skill than their brother(s)?
• What role do professional advisors play in maintaining an unequal distribution of the family’s resources?

Cheers to the increase in daughter successors! As we spur them on, let’s also turn our attention to the many daughters who have been invisible when leaders of family businesses are chosen and trained. And let’s stop the purge of daughters who lead and grow their families’ businesses.