CBS prepares the next generation to take over the family business

In Denmark, there are around 200,000 sons and daughters whose parents own a company.

Research shows that these children have a particular potential to run a business themselves. But when the parents decide to step back, it is only in one out of five cases that the daughter gets the keys to the executive office. In the other four, it is the son who takes over as leader. 

If the current development continues, it could take up to 150 years before we see gender equality in family-run businesses. 

That is what a major research project at the Centre for Owner-Managed Businesses (COMB) at CBS has shown. In the project, which is called NextGen, the researchers focus on potential gender differences and what kinds of barriers might prevent daughters from being considered as successors. 

“As an economist, I have to point out that the strong gender imbalance is a problem. The research provides no evidence that women are less capable of running or leading a company. So, we are essentially overlooking nearly half our talent pool. That means we ultimately miss out on growth opportunities,” says Kasper Meisner Nielsen, Professor of Finance and Academic Director at COMB. 

Knowledge can help change habits 

He adds that achieving real change in gender balance will require a shift in culture, and that research plays a crucial role in this process. Through podcasts, newsletters, interviews, conferences, workshops and dialogue tools, he and his colleagues work closely with the business community across Denmark to raise awareness of the challenge we face in unlocking the potential of daughters. 

“Our research generates knowledge that allows us to highlight a problem.  Having data to support your argument is incredibly important when it comes to changing people’s assumptions and habits and challenging myths,” says Kasper Meisner Nielsen. 

But raising awareness among decision-makers, organisations and current business owners who may eventually pass the company on to their children is only one part of the challenge. Another is convincing daughters that they have what it takes – if they are given the opportunity. 

“Although our research shows that sons and daughters are equally interested in entrepreneurship, we can see that sons are more likely to be involved in their parents’ company.  Daughters, meanwhile, tend to have fewer networks and role models in the world of entrepreneurship,” he explains. 

Role models pave the way for tomorrow’s female business leaders 

To help change that, COMB has created a database of current female business owners. You can meet them in podcasts and other formats where they share their experiences. One of them is Gitte Kirkegaard, who has served as CEO of the family-owned company Logitrans for nearly ten years. The company produces handling equipment for markets all over the world. 

Gitte Kirkegaard has been CEO of the family-owned company, Logitrans, for almost ten years, which produces transport equipment for most of the world.

“I want to show other women that it is possible to take over a family business. That is why I joined the NextGen project and why I am happy to give interviews,” said Gitte Kirkegaard when COMB published a report last year on the gender imbalance in family-owned companies. 

Kasper Meisner Nielsen emphasises that this is not just about getting more women into CEO positions in family businesses. From a societal perspective, it is just as important that some of these women also go on to found their own companies. 

“This is not a zero-sum game. On the contrary, the goal is to have more leaders and more companies overall. And when it comes to entrepreneurship, research shows that sons and daughters of business owners are more entrepreneurial than average. But here we see a gender gap too,” he says. 

Among NextGens, more than one in three men had founded at least one company by the age of 40, compared to just one in seven women. That said, NextGen women do start more companies than those whose parents are not business owners. 

Key findings from the NextGen research 

• NextGens are more proactive and engaged in running businesses than a control group of similar young people. 
• NextGens are not only involved in their parents’ business – they also start their own companies more often. 
• NextGen women are more go-ahead than the men in the control group, but significantly less go-ahead than NextGen men.  
• NextGen women are not involved to the same extent as NextGen men in the management and ownership of the family business.