Professor at CBS: No equality for another 150 years

Research shows that family businesses are only passed on to a daughter one out of five times. If the current trend continues then it will take up to 150 years before daughters are given the keys just as often as sons.

01/08/2024

Gitte Kirkegaard

When Gitte Kirkegaard thinks back to the start of her career, a personality test helped her determine what to pursue. Today she is the CEO of her family’s company, Logitrans, which manufactures transport equipment for most of the world.

She is the middle daughter of three women. Her younger sister was not interested in getting involved in the family business, but Kirkegaard and her older sister were.

My dad suggested that he, my older sister and I take a personality test.

-Gitte Kirgegaard, CEO

“We had both studied to be engineers. Encouraged by our father, we worked in other companies. At one point I wanted to focus more on sales and marketing but that wasn’t possible in my job at the time. This was possible at Logitrans but before things progressed that far my dad suggested that he, my older sister and I take a personality test,” explains Kirkegaard.

As it turns out, they each had quite different personalities, with the two sisters complementing each other quite well. They simultaneously drew up a profile of the skills the company’s future CEO should possess. Kirkegaard matched them surprisingly well.

ROLE MODEL

“Even though that was more than 20 years ago, I still have the profile on my computer. My dad was incredibly wise because it was skill that determined who would eventually take over for him. And not who was the oldest or who was a son. I believe that more companies would find success if they took this approach,” asserts Kirkegaard.

She has been the CEO for eight years now and is pleased that her older sister, who is responsible for production, is also on board at Logitrans. Even though they never had to compete with a brother, she knows that as a female CEO of more than 150 employees that she is a bit of a rarity.

“I’ve realised that I’m somewhat of a role model. That’s the reason I’m affiliated with the NextGen project and doing this interview. I want to show other women that it can be done,” she adds.

According to Professor of Finance Kasper Meisner Nielsen, who manages the Centre for Owner-Manged Businesses at CBS, Danmark sorely needs more female role models. Together with his colleagues, he has spent almost 20 years scouring Denmark for family-owned businesses, shedding light on their challenges and potential.

LACK OF WOMEN HAMPERS GROWTH

As an economist, I must emphasise that these numbers pose a problem.

 - Kasper Meisner Nielsen, Professor

“One of the biggest challenges is that only one in five businesses is handed down to daughters when passed on to the next generation. Even though the share of women has been increasing slightly over the past 40 years, it will take up to 150 years at the current rate to reach a fifty-fifty share,” explains Nielsen, adding:

"As an economist, I must emphasise that these numbers pose a problem. There’s nothing in the research that indicates that women are worse at running and managing a business. In other words, we’re ignoring almost half of the talent pool. Ultimately, this means that we’re missing out on growth opportunities.”

According to Nielsen, if daughters were involved as often as sons, then more people would have a chance at being considered for the position of CEO, likely leading to an increase in quality. Nielsen goes on to underline that it is just as important that some of these women start their own companies:

“It’s not a zero-sum game. On the contrary, it’s a matter of creating more leaders and companies overall. And when it comes to entrepreneurship, research shows that the children of business owners are more entrepreneurial than average. But gender bias also exists here as well.”

A GENERATION WITH DRIVE

By the age of 40, more than one in three next-generation men has founded at least one company, while only one in seven women has. Next-generation women, however, start more companies than those whose parents do not own a business.

“We can see that the children of business owners are more entrepreneurial than their peers. They’re not only involved in their parents’ business but they are more prone to start their own and are more likely to sit on the boards of Danish companies. Women’s potential, however, is not realised to the same extent as men’s,” explains Nielsen.

Together with his colleagues, Nielsen will soon publish a report that attempts to identify some of the reasons why these gender differences exist.

“It all boils down to how we can produce more female leaders,” Nielsen contends, stressing that planning the change of ownership is an additional challenge for family-owned businesses on top of bringing the potential of daughters into play.

PLAN WELL IN ADVANCE

“A great deal of planning is required if a change of ownership in the family is to go well. The children need to obtain a relevant education and gain relevant work experience. All of this needs to happen before the handover becomes a reality,” clarifies Nielsen, adding:

“That’s why the parents have to decide early on whether they want their company to continue to be in the family. Or whether they would like to sell. Where is the industry headed and where are the opportunities? Accepting that you have to hand over your life’s work to someone else can be tough, as can knowing that difficult conversations may lie ahead with the next generation.”

In addition, the owner -typically the father - seldom has time to for longterm planning.

Nielsen’s previous research results show that generational changes are extremely costly to the bottom line if not handled properly in advance. The new generation, in contrast, does just as well as an external CEO if they have managed to acquire the right skills and qualifications.

IN HER FATHER’S FOOTSTEPS

Simone Donbæk aims to follow in her father’s footsteps. In a few years, she hopes to be promoted to CEO in the family-owned company, Ledon, which makes playgrounds. She did not make this decision, however, until after taking a break from her studies and travelling abroad.

“My parents always emphasised that we should shape our own futures. And my younger brother, who I’m remarkably close to, was too busy with other things to want to learn about the family business. He started his own company before he turned 18. When I was younger I had other plans, but I still wanted to get involved in Ledon,” recounts Donbæk.

Sometimes there’s been heated discussions when it comes to collaborating with my dad.

- Simone Donbæk, sales manager and co-owner

Today – after 11 years in the family business – she is responsible for development, sales and marketing and her father remains at the helm.

“Sometimes there’s been heated discussions when it comes to collaborating with my dad. We needed to sort out our parent-child roles and create a more professional relationship as equals. This was difficult during the first few years, but we’ve talked extensively, and I got input from an external coach. Today we frequently consult each other and are familiar with one another’s strengths,” shares Donbæk.

Once she has learned more about other aspects of the company, such as production, logistics and purchasing, she will be able to take command on her own. She is also aware that she is about to enter a male-dominated world.

“It’s not something I think about. But, on the other hand, I have to admit that I already meet scores of men over the age of fifty on a daily basis,” she admits with a smile.

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Contact:

Professor Kasper Meisner Nielsen, kmn.fi@cbs.dk

Journalist Kent Kristensen, kk.slk@cbs.dk

The page was last edited by: Sekretariat for Ledelse og Kommunikation // 01/08/2024