The Women at the Top of Great American Family Businesses
In 2019, of the Fortune 500 list of top U.S. companies, 33 firms had women CEOs; the highest number on record and a big increase from the two women on the list in 1999. In the first quarter of 2020, women were leading some of the largest multinational corporations in the U.S., including IBM, Oracle, Lockheed Martin, and General Motors. And several well-known billion-dollar businesses over the past two decades have been started by women, including shapewear brand Spanx, social-dating app Bumble, and genetic-health/ancestry-testing firm 23andMe.
Although these figures may seem like a strong improvement, that is only in comparison to the even more miniscule number of women leaders that persisted until the last few years.
“While we’ve come a long way over the past few decades, the current state of affairs does not come close to resembling equitable representation of women executives at major U.S. companies,” says Emilia DiMenco, president and CEO of the Women’s Business Development Center (WBDC). The Chicago-based national nonprofit provides counseling, certification, access to funding sources, and networking opportunities for women leading startup and established businesses.
Dana F. Silaski, CFA, is a Managing Director in the Investment Banking division of Stephens who leads the Private Company Advisory team. Her own industry, financial services, is one area where Silaski finds reason for optimism that an ever higher proportion of women will become business leaders.
“We work with a significant number of women in professional transaction advisory roles as legal counsel, tax advisors, investment bankers, lenders, and private equity investors,” she says. “As these women participate in meaningful roles, advising boards and company leadership, and as more women pursue MBAs and careers in business, it gives me hope that these women will find their way to the C-suite in the future.”
Many of Silaski’s clients are privately owned businesses with multigenerational family ownership. While she does see women attaining top positions among some of her clientele, Silaski acknowledges that women are still noticeably absent from key decision-making at most firms.
“We continue to see more father-son teams than fathers and daughters, but daughters and female family members do seem to be increasingly involved in leadership roles,” says Silaski. “Also, we are pleased to count as clients a number of women leading ‘first generation’ companies they founded or co-founded.”
Women who are leading family businesses may serve as role models for how to achieve similar progress at other businesses. As of 2019, almost 25% of family businesses had women in charge. A 2019 survey from Ernst & Young of 525 of the world’s largest family businesses notes that family businesses tend to foster an environment of inclusiveness and cohesiveness for both family and non-family employees that can help women rise through the ranks.
EY also points to long-term thinking that sustains the health of family businesses, which can counteract biases — such as doubting the abilities of female executives or overlooking their contributions to the firm — that have excluded women from top spots. Many family businesses have CEOs who serve longer tenures than those of non-family-run businesses, which gives them time to form a better picture of the accomplishments of their top performers. When current CEOs elevate people based on their past successes, regardless of gender, chances increase that women one day will lead those firms, according to EY.
Family businesses often present women who are related to firm owners with a unique advantage over women at non-family-run businesses: access to and influence with the boss. While female family members are not guaranteed leadership roles, that family connection may open up doors that would otherwise be closed at non-family-run businesses. Still, that doesn’t mean that women CEOs at family businesses always have it easier.
“Women who own a family business may face challenges when inheriting companies in predominantly male industries,” notes DiMenco. “Female leaders in particular must battle and tear down stereotypes.” She points out that another special consideration for women leading family-owned businesses is succession planning. “There was an expectation that a father passes a business down to his son,” says DiMenco. “Now we are seeing many different dynamics. There are fathers passing down companies to their daughters and mothers passing down companies to their sons.”
The importance of family dynamics and the accomplishments of women who have forged a path at such firms can be seen in the stories of three prominent American companies.
Ruth Bigelow had a flourishing career as an interior designer until the Great Depression hit. At the age of 49, in 1945, she started brewing and selling her own specialty tea. The variety of black tea with orange rind and spices came to be known as Constant Comment; named for all the positive comments Ruth Bigelow received about it from friends. Her husband, David, who had worked in publishing and brokerage, started managing the finances for Bigelow Tea. They sold the tea in specialty shops until Ruth and David died in 1966 and 1970 respectively.
Their son David Jr. then took over. He ran the company with his wife, Eunice. Together they expanded the company by adding varieties and introducing Bigelow Tea to mass-market grocery stores, which spread its customer base. In 2005, they turned over the family business to their daughter, Cindi, who is president and CEO.
Cindi spent 20 years learning every aspect of the business before taking the top spot. Bigelow Tea has annual revenue of $200 million, 24% market share of specialty tea in the U.S., employs more than 350 people, and is one of the last major privately held tea companies. Fairfield, Connecticut-based Bigelow Tea has been 100% family-owned for three generations, and is a Certified B Corporation, meaning it adheres to verified standards for ethical business practices.
Abigail Johnson is another third-generation president and CEO. However, unlike Bigelow Tea, Boston-based Fidelity Investments is minority-owned by the Johnson family, with more than half of the firm owned by employees and former employees. Abigail’s grandfather, Edward C. Johnson II, co-founded Fidelity Management & Research in 1946.
Abigail’s father, Edward “Ned” C. Johnson III, became CEO in 1977. Over the next few decades Fidelity expanded into 403(b) and 401(k) retirement plans, ETFs, custody and clearing, online brokerage trading, financial advisory services, and insurance products. Meanwhile, Abigail Johnson received a Harvard MBA and joined the firm in 1988 as an equity analyst. She became president of Fidelity Asset Management in 2001 and then in 2005 became head of Retail, Workplace and Institutional Business. In 2013, Abigail Johnson was appointed president of the entire firm, the next year added the CEO role, and in 2016 also became chairman.
Today, Fidelity is among the country’s largest financial institutions. In 2019 it had annual profits and revenue of $6.9 billion and $20.9 billion respectively. The firm employs more than 50,000 people. Abigail Johnson consistently ranks among the top ten in the Forbes list of the World’s 100 Most Powerful Women, and in 2019 she was listed as the second most powerful woman in finance, according to American Banker magazine.
In 1936, Michael Redstone founded the Northeastern Theater Corporation as a chain of movie theaters in the Boston area. During the next two decades, the company expanded into other states. Michael’s son, Sumner Redstone, joined the business in 1954 and soon after it was renamed National Amusements Incorporated. Sumner took over as CEO in 1967 and in 1987 acquired the media conglomerate Viacom. Sumner also brought his daughter, Shari Redstone, into the company and by 1995 had appointed her executive vice president of National Amusements.
In 1999, Sumner Redstone’s first wife filed for divorce and Shari Redstone became president of National Amusements. The next year Viacom acquired CBS Corporation, which itself had once been Viacom’s parent company. Shari Redstone had practiced corporate law prior to joining National Amusements, a background that proved essential in navigating the complex legal battles and family struggles for control of the sprawling media empire that unfolded as a result of Sumner’s divorce.
This entailed Sumner Redstone engineering the 2005 split of Viacom and CBS into separate companies and Shari Redstone playing a crucial role in the 2019 merger of them back into one publicly traded entity. (Shares are majority owned by the privately held National Amusements.) As of May 2020, Sumner Redstone was chairman of National Amusements while Shari Redstone was president of National Amusements and chairwoman of ViacomCBS. In 2019, National Amusements was estimated to employ over 23,000 people and ViacomCBS had revenues of $6.8 billion.