More women on boards of Irish family firms than global average
John Dillon, leader with PwC Private, says PwC’s 2023 ‘Transform to Build Trust’ highlights great confidence in Irish family businesses.
Irish family firms are more likely to have more women on their boards than the global average, according to the PwC 2023 Irish Family Business Survey.
The research also suggests that having a more diverse board has led to a stronger financial performance for the Irish family firms surveyed, whose 84% sales growth in the last financial year compared positively to 71% for their global peers.
PwC’s 2023 ‘Transform to Build Trust’ poll of 2,000 Irish and global family businesses across 82 countries also found that Irish family firms have greater growth ambitions for the next two years, with 82% in Ireland versus 77% globally.
Irish family firms have also been very quick to bounce back from Covid pressures, with 55% enjoying double-digit sales growth in 2022, up from 22% in 2021. While board gender balance is just one factor in driving growth in Irish family firms, the numbers are very encouraging for those companies committing to diversity.
At 74%, Irish family firms are more likely to include women on their boards than their global peers, at 69%. However, 32% of Irish respondents have no-one from a different industry background on their boards versus 26% globally; and 55% have no one under the age of 40 versus 57% globally.
The Irish survey respondents said they accepted that they have more to do on diversity. Just 16% of Irish family firms have a well-advanced commitment to progress diversity and inclusion (global, 21%) and only 34% have a person or a team responsible for diversity and inclusion versus 34% globally.
John Dillon, leader with PwC Private, said: “Irish family businesses are confident about the future and have proven that they are resilient, having the ability to deal with change in a challenging landscape. To continue this trajectory, firms will need to focus on continuing to build trust across all levels and amongst all stakeholders in the business.
“There is also clear evidence from the survey that being advanced in having an agreed and well-communicated ESG strategy correlates strongly with success and other positive attributes such as improved financial performance.
“Irish family businesses have a great opportunity in this area. Businesses that are advanced in ESG strategies have an opportunity to gain a competitive advantage in the face of continued disruption.”
Meanwhile, in looking at the digital capabilities, the PwC survey found that only 39% of Irish family firms are strong in digital versus 42% globally. Only 42% of Irish family firms plan to invest in digital over the next two years, down from 48% in 2021. And just 13% in Ireland are actively protecting their private data versus 29% of family firms globally.
Mairead Harbron, partner with PwC Private, said: “While market pressures and rising costs mean survival is a key priority for Irish family businesses, our latest data shows that those family businesses which are focused on digital transformation and diversity are reaping the rewards.
“Irish family businesses have more to do on digital transformation and diversity. Now more than ever, building competence and achieving strong financial performance are linked to corporate responsibility. The message is clear, for family businesses to survive, they must transform. And that transformation needs to be now.”
The PwC survey also found that trust is very important in the management of family businesses is trust. Irish firms came out well on the subject. For example, 74% say that they are fully trusted by suppliers (global: 59%); 68% say they are fully trusted by customers (global: 51%); 84% are fully trusted by family members (global: 74%).
However, like their global counterparts, the survey also points to Irish family businesses needing to be more proactive in building trust with certain stakeholder groups, they need to mind the trust gap.
For example, 89% of Irish family businesses believe that it is essential to be trusted by customers, but only 68% report to be fully trusted by this stakeholder group; 76% believe that it is essential to be trusted by their employees, but only 57% report to be fully trusted by them.
And while trust levels between family members is quite high, still around a fifth of Irish respondents admit that trust is low between certain types of family members i.e. between Next Gen family members and the current generation, between family owners and non-family management.
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