This recent FFI study found that family firms have fewer diversity management policies, and were less diverse on the counts of women or minorities in top management or on company boards, than non-family firms. Families need to resist the temptation to conduct business based on practices employed by previous generations; diversity is already a key issue for business governance and is becoming more relevant to all stakeholders.
Family managers may be averse to diversity management policies, as they might fear that they will dilute family ties, mutual trust and coordination, tacit knowledge and control over the firm. However, even though family firms are less diverse compared to nonfamily firms, their financial performance is better. The question that emerges from the findings is — does it make sense for family firms to be proactive in implementing diversity management policies? The answer is “Yes.”