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Is Your Family Business Giving Women the Short End of the Stick? Here's How to Recognize and Combat Discrimination. The last place women might expect to experience discrimination is within their family business. But research shows it's a significant problem. Here's how to recognize and combat it in your business.

By David Y. Choi Edited by Jessica Thomas

Key Takeaways

  • New research reveals gender discrimination in family businesses is widespread.
  • Some unique characteristics of family businesses can actually make the problem worse.
  • We share seven ways to recognize and combat discrimination in your business.

Opinions expressed by Entrepreneur contributors are their own.

For Janette Silva, having a family business has been both a blessing and a curse. As the sole daughter, her involvement with the family business was never predetermined, in contrast to her brothers, who have enjoyed the security of stable salaries and lifelong perks a family business brings.

Gradually, Silva took on the mantle of running the company, yet the official CEO title remained out of her grasp. In addition to her professional duties, she shouldered the care of her aging parents and managed her household responsibilities. This burden wasn't the subject of discussion but rather her family's unspoken expectation. At her workplace, she often cringed when she heard phrases like, "You don't know what you're talking about; let me talk to your dad" or "Ah, I see, you got this job because you're his daughter."

Although women in the broader business landscape contend with various gender biases, those in family businesses grapple with an added layer of complexity and severity that further complicates the picture — and the situation is worse than it might appear.

Related: Running a Family Business Means You Need to Prepare Your Kids to Take Over — Here's How to Do It Right.

Revealing gender discrimination in family businesses

Regrettably, stories like Silva's are all too familiar. That should be no surprise, as gender-based expectations persistently permeate family dynamics. Nevertheless, in today's world, it's both unjust and unwise to limit the prospects of a capable family member on the basis of their gender.

A research team composed of experts from my team at Loyola Marymount University's Family Business Entrepreneurship Program, Business Consulting Resources, the University of San Francisco's Gellert Family Business Center and Women Leaders in Family Enterprises decided to examine this issue more closely.

We were curious about the extent to which women face uphill battles and how the experience of bias and discrimination in the family business impacts how they perceive their own sense of work performance and career progressions. We embarked on an extensive three-year study, which entailed conducting qualitative interviews and organizing focus groups in 2019 and 2020. This was followed in 2023 by an extensive survey involving more than 100 women leaders. Our respondents primarily represented multi-generational businesses (77%) consisting predominantly of CEOs or senior managers (74%) who boasted an average tenure of 16 years.

Remarkable revelations

Our study revealed that gender discrimination still casts a shadow, manifesting as the infamous "glass ceiling effect," the persistent "sticky floor impact" and a lack of opportunities in leadership roles. Around 49% of our respondents reported experiencing gender bias (compared to 42% for all businesses in the U.S., according to Pew Research from 2017). Forty percent of the respondents who acknowledged bias also expressed a belief that their gender had hindered their progress within the family business.

Given that our survey respondents were mostly top managers, it is not surprising that much of the biases came from the external business environment. They emanated from customers (51%), vendors (37%) and the broader business community (45%), highlighting the pervasiveness of the issue in our society. Astonishingly, family members themselves served as the source of discrimination in over a third of cases.

One respondent candidly shared, "My father openly says women are no good in business," while another recounted, "The men in the family are automatically granted the most senior positions, leaving me with limited options." Additional comments painted a similar picture: "Had I been a boy, I would have been a managing director, but as a girl I wasn't considered," and "I was told that the CEO position would always be held by a male." One woman leader poignantly reflected, "In my family business, I had to work tirelessly compared to my brothers to achieve the same recognition."

The consequences of gender biases proved enduring, leaving a lasting impact on those affected. Individuals who experienced bias reported that it had a detrimental effect on their work performance. They were more prone to suffering from imposter syndrome — an affliction characterized by feelings of inadequacy, self-doubt and a haunting fear of being exposed as a fraud. This syndrome had the potential to further erode their performance, making these findings both eye-opening and concerning.

Related: The Pros and Cons of Hiring Family Members in a Small Business

Navigating unique challenges in family businesses

Women in family-owned businesses have traditionally fared better than those in large publicly owned companies. For instance, it was widely celebrated that, as of January 2023, women had exceeded the 10% threshold for Fortune 500 CEOs. On the other hand, it is generally accepted that at least 24% of family businesses are led by a woman CEO or president. This progress is commendable, especially when considering that family businesses often impose distinctive challenges to their female members.

One key challenge arises from entrenched family traditions rooted in the culture and history of these businesses, which can overshadow an objective assessment of qualifications. Typically, sons ascend to leadership roles, relegating daughters to supportive positions, regardless of their abilities. Furthermore, the familial dynamics and the informal nature of decision-making within these family units — relying more on personal biases and stereotypes than formal policies and procedures — can further perpetuate gender disparities. Compounding the problem is the usual absence of external oversight (e.g., external board members) in family-owned enterprises.

Adding to the complexity of gender discrimination in family businesses is its deeply impactful nature. Women who experience gender bias often encounter it from their own kin, including parents, siblings and close family associates. This personal dimension can heighten the emotional toll, and confronting family members risks straining vital relationships further.

Due to their emotional commitment in the legacy of the business, many women find it exceedingly difficult to pursue other opportunities, even when discrimination persists. This predicament is exacerbated by the fact that women in family businesses often have limited external support systems to turn to, as seeking help from external sources can amplify familial conflicts. As a result, women who grapple with gender discrimination in family businesses often find themselves extremely isolated, making the experience all the more formidable.

This type of situation could sound familiar to you — perhaps you're the leader of a family business or have experienced it firsthand. But it is possible to break the chains of gender bias and impostor syndrome in family business.

The following are the strategic steps you can take to not only dispel gender bias but also fortify family dynamics and improve business performance.

Acknowledge the problem: Collectively agree on the presence of gender bias within the family business and the need for change. Ensure buy-in and commitment from top leadership.

Revamp the family charter: Revise the family charter or institute a code of conduct that explicitly champions gender equality and nondiscrimination within the family and the business.

Educate and raise awareness: Educate all family members and employees about the prevalence and significance of gender equality using workshops and other training programs.

Implement a gender-equal HR policy: Rework the HR policies to ensure fairness, objectivity and transparency across all facets — hiring, evaluation, promotion and compensation.

Forge an equal opportunity succession plan: Redefine succession planning through an egalitarian lens, focusing on capabilities rather than gender.

Foster a supportive culture: Establish an inclusive and supportive work culture where every individual can freely voice concerns without reprisal. This culture also acts as a potent antidote to imposter syndrome.

Tap into external expertise: Consider enlisting the aid of external consultants or experts in diversity and inclusion to provide guidance and offer an objective perspective.

Related: How to Sustain a Family Business Across Generations

Transforming family businesses

Gender bias in family businesses can have a detrimental effect on both the business and the family. On the other hand, breaking free from bias and discrimination and rewriting the rules can have a positive impact on the business, leading to improved morale and a competitive advantage in the marketplace. It also fosters more harmonious family relationships, allowing both the family and the business to truly flourish.

David Y. Choi

Conrad N. Hilton Chair of Entrepreneurship and Faculty Director of LMU Family Business Entrepreneurship Program

Dr. David Choi is an award-winning professor at Loyola Marymount University and serves as an advisor to startups, venture capital firms and family businesses. He is the author of Values-Centered Entrepreneurs and Their Companies and dozens of academic articles on entrepreneurship.

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