India has witnessed a sharp decline in female labour force participation in recent times. Approximately, three out of four women over the age of 15 in India are neither working nor seeking employment.1 In fact, the participation rate of Indian women (ages 15 and above) in the labour force stands at a dismal 23.6%, which is one of the lowest in the world.2 Ranked 130 out of 189 countries, India’s performance in the Gender Inequality Index published by the World Bank was equally deplorable in 2018.3 While only a few women participate in the workforce, fewer can reach positions of power at their workplace. A study conducted by the Thomas Schmidheiny Centre for Family Enterprise at the Indian School of Business revealed that the percentage of women directors on the board of National Stock Exchange (NSE) listed companies was only 14.3% in 2017.4 In this bleak scenario, how do Indian family businesses fare when it comes to women participation and leadership?
While only a few women participate in the workforce, fewer can reach positions of power at their workplace
Indian business families used to be predominantly patriarchal. Matters of succession and inheritance of the business concerned only male family members. Men actively participated in dining table conversations around the family business, while women remained mostly silent or engaged only occasionally. With rising levels of education and awareness, and the shrinking size of families, women have now come to play active roles in family businesses and occupy important positions in them. This article explores the changing role of women in Indian family businesses.
Women’s Involvement in Family Business: Tracing the Trajectory
The Early Days: At the 7th Asian Invitational Conference on Family Business organised by the Thomas Schmidheiny Centre for Family Enterprise at the Indian School of Business, Gita Piramal, the noted business historian, traced women’s participation in family business in India back to the family planning programme, initiated by the Ministry of Health and Family Welfare in the 1960s. As the size of the family became smaller, the number of sons in the joint family capable of running the business decreased. Families with only daughters or those with one son and one daughter started focusing on nurturing and training their daughters for family business. They were sent to elite business schools for higher degrees and international exposure. This is how the daughters in business families became scions of their organisations, diversifying and growing, and becoming the able custodians of their family business.
Three out of four women over the age of 15 in India are neither working nor seeking employment
Legal Framework: Legal amendments helped women come out of the shadows, become proactive and step up to new challenges. The amendment to the Hindu Succession Act in 2005 considered every daughter, whether married or unmarried, a member of her father’s Hindu Undivided Family (HUF) and granted daughters the rights, duties, liabilities and disabilities that were earlier limited to sons. This landmark decision conferred property rights on daughters.
Carving the Path
Daughters as Gen-Next Pioneers of the Family Business:
Over the years, many daughters have become the faces of their family businesses. Their journey, however, has not been easy. Yet, they took up the challenge and proved their mettle in taking the family legacy forward and making a mark of their own.
In many cases, the daughters were groomed and mentored by the family to take on the leadership role. Two examples are the Apollo Reddy sisters (Preetha, Suneeta, Shobana, Sangita) who carved out niche roles to diversify and scale the Apollo Group into India’s largest healthcare conglomerate and the Parle Agro Chauhan sisters (Schauna, Alisha, Nadia) who took over the business after their brothers’ exit.
Over the years, many daughters have become the faces of their family businesses. Their journey, however, has not been easy
In both instances, the daughters were involved in the business from the beginning and picked up skills and knowledge by working alongside professionals and promoters in the family business. Hard work, the quest for knowledge, business acumen, eye for quality and detail helped them go against the socio-cultural biases and propelled them to contribute successfully to the family business. Lavanya Nalli is another living example of this (Exhibit 1).
Business Today has been publishing a listing showcasing the “Most Powerful Women” in business since 2003. Women in family business constitute on an average 24% of the annual list since 2003. Of these women, 76% are associated with their father’s family business while 24% are associated with the spouse’s family business.5
The Role of Daughters-in-law in Family Businesses:
The daughters-in-law in a business family had not always been the first preference for a business partner or leader in the family. Most of them had traditionally played the role of nurturers, caregivers, and the emotional support system to the family. However, their positions have changed over time, and many daughters-in-law have now come to play pioneering roles in their family business. The next section presents narratives of daughters-in-law in business families who have spearheaded their business ventures at different times in Indian business history.
Pathbreaking Daughters-in-law: In the 1930s (pre-independence India), Sumati Morarji was married into the business family that owned the Morarjee, Scindia Steam Navigation company. When the Great Depression and financial crisis hit India, she took over the reins of the company in the absence of her father-in-law and grew her expertise in the shipping trade. She expanded the company further through her efforts. She is accredited as the “first woman” of the Indian shipping and is the first woman in the world to head an organisation of shipowners (Indian National Shipowners Association).
Simone Tata moved to India from Switzerland when she married Naval Tata and joined the Tata business family. Lakme, the cosmetics range was her brainchild to cater to the needs of the burgeoning middle-class Indian women in the 1960s. She single-handedly changed the Indian beauty and make-up landscape. However, the brand was sold off to Hindustan Lever in the 1990s.
Gita Piramal, after being married into a business family (VIP Industries), attempted to set up an office furniture manufacturing unit in Badari, Himachal Pradesh in the early 2000s. She wanted to build an all-women workforce sourced from rural and interior parts of India. However, she was incessantly harried by middlemen (labour mafia) and finally had to sell the company.
All these women were adventurous enough to venture into new areas which they had not explored before. They were instrumental in introducing new concepts or products or services which were considered radical at that point of time.
Family and Family Business Culture: Daughters-in-law often face the daunting task of adapting to the culture, traditions, and values of another family, after marriage. In business families, the values and culture of the family are often reflected in the business and can be challenging for an outsider to imbibe. Amala Akkineni was taken by pure admiration and awe when she married into the illustrious Akkineni family of the Telugu film industry. She internalised the family tradition and culture and realised the value of respect, hard work, family bonding, and sacrifice. She started assisting in the activities of Annapurna International School of Film and Media run by her family and became a member of their board. She trained herself for the role, initially partaking in smaller tasks and activities and then scaling up to bigger roles and responsibilities. She eventually took over the management of the school to carry forward their family legacy of three-generations of film-making, production and film education.
All these women were adventurous enough to venture into new areas which they had not explored before. They were instrumental in introducing new concepts or products or services which were considered radical at that point of time
Crisis Management: The daughters-in-law of the family often had to take on leadership roles in the business due to the untimely demise of their spouses. Vidya Chhabria (Jumbo Group), Urvi Piramal (Piramal Group), Jyotsna Suri (Bharat Hotels and Hospitality Group), Vinita Singhania (Singhania JK Lakshmi Group), had to step up and lead the company through a crisis after the death of their husbands. Though the legacy had been handed down to them, they had to manoeuvre through difficult times successfully and secure the business for the next generation. Nearly 24% of the “Most Powerful Women” within family businesses in India are daughters-in-law or spouses who have either inherited the business or are working jointly with their spouse in the family business.
Creating an Ecosystem of Support
The myth that women are not adept at networking and socialising in a business environment has long been put to rest. The change has been driven by societal progress as well as by the talent and ambition of women– whether daughters or daughters-in-law, as the previous section has shown. This change is also evident from Business Today’s list of the ‘Most Powerful Women,’ where almost 26% of the recipients (from business families) hold an MBA degree, and 20% of the recipients (from business families) hold a masters or post-graduation degree (apart from MBA).
Women in business families were earlier relegated to softer roles in Corporate Social Responsibility, Philanthropy, Human Resources. They are now leading strategic decision making and operations across all industries. Whether they are actively involved in the business or not, women in business families need to be trained to contribute effectively to the business, both at operational and leadership levels, since all business decisions significantly impact family wealth and welfare. What are some ways of creating this support ecosystem?
Women in business families were earlier relegated to softer roles in Corporate Social Responsibility, Philanthropy, Human Resources. They are now leading strategic decision making and operations across all industries
Work-Life Conundrum: Familial duties primarily fall on women. While family and society impose restrictions on working women, many women themselves restrict their travel and extended working hours, out of a sense of responsibility towards their home. Support from the family and sharing of household responsibilities can enable women to successfully manage work and strike a balance between work and life. There should be an open and supportive ecosystem at home and more involvement from the partners to support women in their quest.
Legal Framework: The enforcement of the Companies Act 2013 has ensured greater gender diversity on the boards of listed firms in India. This legislation has made it mandatory for all listed companies and other large public limited companies to appoint at least one woman director to their boards. As an immediate effect of this Act, the percentage of women directors in India increased by 4.7% from 7.7% to 12.4% (2017).6 The Act has helped India reach the global average, which stands at roughly 15%.6 According to an analysis done by the Thomas Schmidheiny Centre for Family Enterprise at the Indian School of Business Indian family firms were quick to meet the regulation, with standalone family firms having a higher percentage of women directors than the family group firms.4
However, this Act does not stipulate the minimum educational qualifications and professional experience required for a woman to become a board member in a company. This loophole makes it easy for the promoters of smaller firms to comply with the Act by appointing their female family members without foregoing their administrative power. Larger family business groups may not be able to appoint their family members very easily as many of them have well established independent boards.
Increasing gender diversity in leadership roles will require sincere commitment and cautious implementation. Family firms are leading the way in appointing women directors on boards in various capacities as independent, executive or promoter directors. The role and responsibilities of women as independent board members are enormous, as they represent the interests of minority shareholders. We would argue that smaller family firms and organisations can empower these women directors by training them for challenging roles.
The Way Forward
There are many women role models in business and family businesses. Family businesses, globally, have a better share of women in leadership roles either as promoters or non-promoters. The essence of family businesses and their key difference from non-family firms is their long-term strategy and vision to preserve and sustain the business for future generations. With this focus, the average tenure of family leadership is usually around 20 years as compared to six years for non-family firms. The long tenure provides an opportunity for the women leaders in the family business to adapt and influence their management styles and showcase their contribution and accomplishments over time.
The role and responsibilities of women as independent board members are enormous, as they represent the interests of minority shareholders
However, the concern remains with the grooming and emergence of the next generation of the women leaders. Mentoring becomes important in this context to get more women into the family business. Not least, organisations need to put in place appropriate gender agnostic performance management systems. While interventions at various levels to promote gender parity provide a starting point, their implementation should be the final goal for firms and individuals.
Family business decisions on succession, inheritance, the CEO or board member appointment should be based on capabilities, interests, and willingness instead of gender or kinship
Family business decisions on succession, inheritance, the CEO or board member appointments should be based on capabilities, interests, and willingness instead of gender or kinship. Women already involved in their family businesses are well placed to take the lead and bring about change in their own organisations, which will further have a multiplier effect in terms of creating a conducive environment to achieve a gender agnostic, equal opportunity work environment.