Women Matter.Madrid, March 2013CONFIDENTIAL AND PROPRIETARYAny use of this material without specific permission of McKinse...
Women matter Storyline 2007          2008            2009               2010               2012 Gender        Female      ...
2007- Gender diversity: a corporate performance driver Companies with a higher proportion of women in their top management...
2008 - Female leadership : why does it matter? Criteria of Organizational Performance Profile (OPP)                       ...
2008 – Female leadership : Key traits (1/2)  Leadership behaviors…                                         … improve organ...
2008 – Female leadership : Key traits (2/2)On average, women use five of the mine leadership behaviors that improveorganiz...
2009 – Women leadership: a competitive edge in and after the crisisWomen more frequently adopt the two types of leadership...
Where are we in 2010?                        McKinsey & Company   | 7
2010 – Women at the top of corporations: a long way to go In 2010, women are still underrepresented in boards of corporati...
2010 – Women at the top of corporations: A deeper look Gender diversity in executive committees of corporations in 2010   ...
2010 – Women at the top of corporations: Inertia will not be enough Changing the promotion system is critical as the incre...
2010 – Women at the top of corporations: Making it happen The most effective measures promoting gender diversity focus on ...
2012 – Walking the talk 40% of companies have 50% of measures in place in all 3 parts of the ecosystem Examples of gender ...
Impact of the crisis on all employee programs (n-150)Showing commitment                                                   ...
2012 – Government supportCorrelation between government support and women’s position in the workplaceNumber of countries =...
Well implemented1Midway execution                                                                                         ...
2012 – Positive (though slow) impact                                                                                      ...
2012 – Making the breakthrough                                                                                            ...
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Women matter epwn 03 12

  1. 1. Women Matter.Madrid, March 2013CONFIDENTIAL AND PROPRIETARYAny use of this material without specific permission of McKinsey & Company is strictly prohibited
  2. 2. Women matter Storyline 2007 2008 2009 2010 2012 Gender Female Women Women at the Making the diversity: leadership: leadership: top of breakthrough a corporate a competitive a competitive corporations: performance edge for the edge in and Making it happen driver future after the crisis McKinsey & Company | 1
  3. 3. 2007- Gender diversity: a corporate performance driver Companies with a higher proportion of women in their top management have better financial performance Economic performance of the companies with most gender-diverse Companies with most gender- management teams compared with their industry average diverse management teams1 Industry average 11,4% 11,1% 64% 10,3% +10% 47%4 X1,7 +48 5,8% Average ROE2 Average EBIT3 Stock price growth4 2005-2007 2003-2005 2003-2005 compared with Eurostoxx 600 sectorial indexes1 89 companies, identified with the scoring system developed by Amazone Euro Fund2 87 companies, data not available for two companies3 73 companies, financial sector not included4 Of the 89 most gender-diverse companies, 44 have a market capitalization greater than 2 billion eurosSOURCE: Amazone Eurofund database: Amadeus; Research Insght; Datastream; Bloomerg; McKinsey McKinsey & Company | 2
  4. 4. 2008 - Female leadership : why does it matter? Criteria of Organizational Performance Profile (OPP) McKinsey & Company | 3
  5. 5. 2008 – Female leadership : Key traits (1/2) Leadership behaviors… … improve organizational 1performance dimensions Participative decision making Work environment and values Role model Leadership team Direction Inspiration Motivation Expectations and rewards Accountability Leadership team People development Capabilities2 Work environment and value Intellectual stimulation Innovation Efficient communication Direction Individualistic decision making External orientation Control and corrective action Coordination and control1 If more frequently applied on average2 Indirect impact McKinsey & Company | 4SOURCE: Bass&Stogarts Handbook of Learship, B. Bass, 1990; McKinsey analysis
  6. 6. 2008 – Female leadership : Key traits (2/2)On average, women use five of the mine leadership behaviors that improveorganizational performance more often than men, particularly the first three Frequency gap in behaviors between men Leadership behaviors and women1 (%) People development 7 Women apply more Expectations and rewards 4 Role model 4 Women apply Inspiration 1 slightly more Participative decision making 1 Women and Intellectual stimulation Not statistically significant men apply equally Efficient communciation Not statistically significant Individualistic decisio making 4 Men apply more Control and corrective action 91 Example: on a scale of 0 (never) to 4 (fluency, if not always), on “People development" the score is 2.94 for women and 2.76 for men: (2.94-2.76)/2.76= ~7%). Unless otherwise stated, these differences are meaningful according to the t-test with p<0.05NOTE: Scope of the sample: 2,874 women and 6,126 men for 7 behaviors; "Participative decision marking" and "individualistic decision making": 357 women and 327 men (208 McKinsey survey, consistent with Alice H. Eaglys 2001 meta-analysis)SOURCE: Transformational, Transactional And Laissez-Faire Leadership Styles, Alice H. Eagly, Johannesen- Schimidt, and Van Engetn, 2003; McKinsey survey and analysis, 2008; the Leadership Styles of Women and Men, Alice H. Eagly and Mary McKinsey & Company | 5 C. Johannesen- Schimidt, 201
  7. 7. 2009 – Women leadership: a competitive edge in and after the crisisWomen more frequently adopt the two types of leadership behavior seen as mostimportant in and after the crisis Respondent selecting behavior as most important for… Types of leadership Percent behavior1 … managing in the crisis2 … post-crisis peformance2 People development 20 21 Women apply more Expectations and rewards 47 47 Role model 31 25 Women apply Inspiration 48 45 slightly more Participative decision making 34 36 Women and Intellectual stimulation 35 41 men apply equally Efficient communciation 26 20 Individualistic decisio making 9 10 Men apply more1 Control and corrective action 15 121 From analysis in Women Matter 2, 20082 Women Matter 3 global survey, September 2009 (n= 763 respondents; CXO level, senior management, middle managements) McKinsey & Company | 6
  8. 8. Where are we in 2010? McKinsey & Company | 7
  9. 9. 2010 – Women at the top of corporations: a long way to go In 2010, women are still underrepresented in boards of corporations, although improvement has been seen in some countries Woman representation in corporate boards in 2010… Evolution since 2007 Percent Percentage points Norway 32 0 Sweden 27 +3 US 15 NA France 15 +7 Germany 13 +2 UK 12 0 Spain 10 +6 Russia 8 NA Brazil 7 NA China 6 NA India 5 NANOTES: Proprietary database: 441 companies from the local reference index: Norway (OBX-25), Sweden (OMXS- 29), France (CAC 40), Germany (DAX 29), Spain (IBX 35), Russia (RTSI 50), Brazil (Bovespa 52), China (SSE50), India (Sensex 30). For the UK, data from the Cranfield University “The Female FTSE Board Report 2009” (FTSE 100)SOURCE: McKinsey proprietary database, 2010; US: Catalyst, 2009 census, Fortune 500 Women Board Directors (2009) McKinsey & Company | 8
  10. 10. 2010 – Women at the top of corporations: A deeper look Gender diversity in executive committees of corporations in 2010 Woman representation in corporate boards in 2010… Percent Norway 12 Sweden 17 US 14 France 7 Germany 2 UK 14 Spain 6 Russia 11 Brazil 6 China 8 India 2NOTES: Proprietary database: selection of the 362 which disclose their executive committee members within the local rrefence stock index: Norway (OBX- 25), Sweden (OMXS- 29), France (CAC 40), Germany (DAX 29), Spain (IBX 35), Russia (RTSI 50), Brazil (Bovespa 52), China (SSE50), India (Sensex 30). For the UK, data from the Cranfield University “The Female FTSE Board Report 2009” (FTSE 100)SOURCE: McKinsey proprietary database, 2010; US: Catalyst, 2009 census, Fortune 500 Women Board Directors (2009) McKinsey & Company | 9
  11. 11. 2010 – Women at the top of corporations: Inertia will not be enough Changing the promotion system is critical as the increasing number of women graduate will not be sufficient to close the gender gap in top management Women university graduates vs. women in executive committees – 1970s, 2000s, projection for 2040 Country 1970s 2000s 1978 61% 1978 64% Sweden 2010 17% 2010 18% 1975 41% 1975 55% France 2010 7% 2010 9% 1976 32% 1976 60% Spain 2010 6% 2010 11% 1975 32% 1975 55% Germany 2010 2% 2010 4%NOTES: Women graduates are defined as those with the equivalents of a master’s degree (Types 5 and 6 in the ISCED methodology): Fresh equivalent: university degrees Bac+4; executive committee statistics based on McKinsey proprietary database 2010; 2040 extrapolations based on 1975- 2008 trendsSOURCE: McKinsey proprietary database, 2010; US: Catalyst, 2009 census, Fortune 500 Women Board Directors (2009) McKinsey & Company | 10
  12. 12. 2010 – Women at the top of corporations: Making it happen The most effective measures promoting gender diversity focus on women’s development and appraisal N = 3553, C-Level respondents Measure implementation effect on women representation1 Measure Number of points ▪ Visible monitoring by the CEO and the executive team of the CEO commitment progress in gender-diversity programs 22 Women’s indivi- ▪ Skill-building programs aimed specifically at women 19 dual development ▪ Encouragement or mandates for senior executives to mentor junior 18 programs women ▪ Performance evaluation systems that neutralize the impact of 17 parental leaves and or flexible work arrangements ▪ Options for flexible working conditions (e.g., part-time programs) 13 and or locations (e.g., telecommuting) Collective enablers ▪ Support programs and facilities to help reconcile work and family 12 life (e.g., childcare, spouse relocation) ▪ Assessing indicators of the company’s performance in hiring 11 retaining, promoting and developing women ▪ Gender-specific hiring goals and programs 10 ▪ Systematic requirement that at least one female candidate be in each promotion pool Not statistically ▪ Inclusion of gender-diversity indicators in executives’ performance reviews significant2 ▪ Programs to encourage female networking and role models ▪ Programs to smooth transitions before, during and after parental leaves ▪ Gender quotas in hiring, retaining, promotion or developing women1 Difference between the proportion of companies with more than 15% women at the C-level depending on whether the measure is implemented or not2 Ch square >0.053 Does not include respondents who didn’t know which measures were implemented in their company or who didn’t know/preferred no to answer the question about the percentage of women at their level of senioritySOURCE: 2010 Women Matter global survey, September 2010 McKinsey & Company | 11
  13. 13. 2012 – Walking the talk 40% of companies have 50% of measures in place in all 3 parts of the ecosystem Examples of gender diversity measures in each part of the ecosystem Number of companies = 235 ▪ Group CEO’s commitment ▪ Executive committee Management ▪ Targets for womens representation commitment in top positions ▪ Consistency of company culture with gender diversity objective ▪ Networking programs/elements dedicated to women Gender diversity indicators ▪ Leadership skill building programs ▪ Gender representation overall 40% and at certain job levels ▪ Use of external coaches Women’s Collective ▪ Gender representation in ▪ Mentoring programs/events development enablers promotion rounds with internal mentors programs ▪ Programs to increase ▪ Promotion rates by gender at different levels of seniority proportion of potential women leaders ▪ Attrition rate buy gender HR processes and policies ▪ Control over gender appraisal biases ▪ Actions to improve share of women applying for and accepting positions ▪ Control over gender recruiting biases ▪ Internal quotas for women in managerial positions ▪ Logistical flexibility (e.g., remote working) ▪ Career flexibility (leave of absence, option to alternate part-time and full- time periods) ▪ Programs to smooth transition before during and after maternity leaveSOURCE: Women Matter 2012; McKinsey McKinsey & Company | 12
  14. 14. Impact of the crisis on all employee programs (n-150)Showing commitment Impact of the crisis on gender diversity programs (n-144)1 The economic crisis has not had the same impact on women’s programs as it has had on programs for all employees Impact of the crisis on gender diversity programs and on all-employee programs (companies having gender diversity as a top-ten priority2 ) 5 They have received less funding 22 Budget 2 They have received more funding 2 7 Level of attention They have received less attention 15 from top 8 management They have received more attention 21 4 Level of priority They have been given lower priority 16 in the 6 organization They have been given higher priority 21 69 Budget No change 381 This questions was not asked to respondents that selected “No specific measures”2 The trends are identical in the total respondents sampleSOURCE: Women Matter 3 global survey, September 2009 McKinsey & Company | 13
  15. 15. 2012 – Government supportCorrelation between government support and women’s position in the workplaceNumber of countries = 12 Women’s position in workplace Average of indicators: board representation of women; women’s share of men’s working hours; employment rate of women 10 9 Norway 8 Findland Sweden 7 Denmark 6 France 5 Germany UK Netherlands 4 Czech Republic Belgium 3 Spain 2 1 Italy 0 0 1 2 3 4 5 6 7 8 9 Government support Average of indicators: number of children in child care; government expenditure on family/children as percentage of GDP; proportion of men working part-timeSOURCE: European Commission; Eurostat; 2010 Catalyst Census McKinsey & Company | 14
  16. 16. Well implemented1Midway execution Fairly well implemented2 In place3 Gap between measures in place and good implementation Percent, number of companies = 235 CEO commitment 41 92 Management Targets for women’s representation 24 51 commitment in top positions Consistency of company culture 22 88 with diversity objectives Networking programs/events 15 58 Women’s development Leadership skill building programs 13 47 programs Mentoring programs/events 16 69 Indicators 18 56 Collective HR processes and policies 25 50 enablers Infrastructure, e.g., child care facilities 14 431 Measures were rated on a scale of 1-5, with the exception of management commitment measures, which were rated on a scale of 1-4. “Well implemented” means and initiative was given a top score, i.e., 4 on a scale of 1-4 or 5 on a scale of 1-52 Scored 4 (management commitment 3)3 Scored 2 or 3 (management commitment 2)SOURCE: Women Matter 2012: McKinsey McKinsey & Company | 15
  17. 17. 2012 – Positive (though slow) impact Growth since 2007 Percentage points Women’s representation on executive committees and corporate boards by country 2007-111 Executive committees Corporate boards Country Percentage of total, 2011 Percentage of total, 2011 Sweden 21 8 25 1 Norway 15 3 35 3 United Kingdom 11 8 16 4 Belgium 11 4 11 5 Netherlands 8 3 19 12 France 8 4 20 12 Czech Republic 8 0 10 -2 Italy 6 1 5 2 Germany 3 2 16 5 European 6 5 average 10 171 The 2011 figures are mostly derived from 2010 annual reportsSOURCE: Analysis based on annual reports of companies listed on each country’s main index and press searches. McKinsey & Company | 16 Italian data provided by Alberti Governance Advisors
  18. 18. 2012 – Making the breakthrough Odds of advancement for men over those Average percentage of women at various organizational levels for women Number of companies 1301 CEO 2 5.0x Seats on executive 9 committee 1.7x Senior management 14 and vice president 1.8x Middle management 22 2.1x Total company 371 Companies with more than 10,000 employees and/or revenues greater than €1 billion, and that provided dataSOURCE: Women Matter 2012; McKinsey McKinsey & Company | 17
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