Increased Women Participation In Family Businesses In India: Research

The long-drawn debate on increasing women participation in the labour force and overcoming the gender disparity at the professional level has finally witnessed a flicker of hope. According to a research by Yashodhara Basuthakur and Nupur Pavan Bang, despite the low level of women participation in the labour force of India, Indian family businesses have witnessed a systematic rise in women leadership and empowerment. This result takes us by surprise because the Indian Families have traditionally been the patriarchal space ruled by “efficient” male members and only catered and caressed by the “soft” and “ignorant” women in the families. The research also says that there is a need to train women to take up the systematic roles of the business and to create a supportive ecosystem that allows women to switch roles from domestic space to business tables. The story will elucidate the main highlights of the research.

Key Takeaways:

• India has witnessed a steep decline in the female labour force with only 23.6 percent participation of women. Three out of four women above 15 years of age are neither employed nor looking for employment.
• However, India has shown a better result in the increasing participation of women in their family business.
• With the decreased family size and increased education and ambitious women, the family business has increased women participation.
• The amendment to the Hindu Succession Act in 2005 also played an important role in bringing this change. The amendment allowed the daughters or other female members of the family to be an equal heir.
• Daughters-in-laws have now come to play pioneering roles in their family business.
• Traditionally restricted to domestic space, women require training and support ecosystem to take up responsible and challenging roles and bring a significant change in gender equality. 

The statistics and the major change

In recent years, India has witnessed a steep decline in the female labour force with only 23.6 percent participation of women. Besides these, three out of four women above 15 years of age are neither employed nor looking for employment. In this dismal scenario of gender disparity, India has shown a better result in the increasing participation of women in their 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.” says the research.

The enforcement of the Companies Act 2013 mandated the participation of at least one woman in all the firms of India. The Act played a significant role in increasing the gender diversity in Indian firms

The reasons for the increasing gender parity in the family business are as follows:

Family planning and awareness

According to another research, the increase in women participation in the family business can be traced to the implementation and efficacy of 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 the family business.” the current research infers.

Legal Framework

The amendment to the Hindu Succession Act in 2005 also played an important role in bringing this change. It allowed the daughters of the family to be an equal heir and have an equal share of the family business. Through this amendment, women could claim ownership of the family business and manage it as well.

“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”

Business Today has been publishing a list of “Most Powerful Women” in business since 2003. According to the list, 24 percent of the annual list covers the women leaders in the family business, some associated with their father’s business while others contributing to their spouse’s business. This brings us to another major conclusion of the research, the role of daughters-in-law in family business. Discussing the changing roles of daughters-in-law in India, the research says, “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.”

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How has the change happened?

Daughters-in-laws have always been capable of daunting roles like accepting and internalising the environment, rules and customs of another family. While in business families, in addition to home environments, daughters-in-laws are expected to imbibe the system of another business. Crediting the multitasking and ambitious daughters-in-laws, the research says,” 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”

The research also states that many daughters-in-law take over the family business after the untimely demise of their spouses.

“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.” says the research.

Training women and creating a support ecosystem

Women have started participating and excelling in the business roles, breaking down the myth that women cannot deal with the calculative, social and systematic business environment. However, as the research suggests, there is a need to train women to be able to manage the business and adjust to the environment efficiently, because women have traditionally been the caretakers and nurturers. Switching roles from domestic life to business life, under the impending pressure of gender stereotype and the need to perform better to overcome them, requires a grounded training and immense support.

Support from the family

Due to the societal pressure of taking care of the family along with leading the family business, “women themselves restrict their travel and extended working hours, out of a sense of responsibility”. Therefore, a supportive ecosystem to encourage Businesswomen requires an important contribution of support from the families. Families and male counterparts should share household responsibilities and boost women to focus on the business and achieve great heights.

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Support from the legal framework

The enforcement of the Companies Act 2013 mandated the participation of at least one woman in all the firms of India. The Act played a significant role in increasing the gender diversity in Indian firms, however, it has a loophole. The Act does not specify the required qualification for a woman to take up significant roles or just be a part of a small or large firm. The research says, “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.” Besides, the family business takes up women members of the family with the strategy and vision to preserve and sustain the business for future generations. Therefore, the research rightly says, “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”. Furthermore, it is important that women are provided significant positions and trained to deal with challenging roles.

Traditionally restricted to domestic space, women require training and support ecosystem to take up responsible and challenging roles and bring a significant change in gender equality. 

The future generation of women leaders in business:

The research says, “The role and responsibilities of women as independent board members are enormous, as they represent the interests of minority shareholders.” If women are mentored and trained today to take up challenging roles and perform efficiently, they will open doors to include more women in the business.  Since the tenure of a family business is approximately 20 years, women can adapt to management skills, achieve more and take the lead in making changes in the organisation “creating a conducive environment to achieve a gender agnostic, equal opportunity work environment.” Hence, the responsibility of encouraging the future generation of women to take up leadership roles lies in the empowered women of today.

Rudrani Kumari is an intern with SheThePeople.TV

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