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The Business Case of Gender Diversity and the UN Women Empowerment Principles


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Presentation held at the Business and Professional Women's International Congress in Helsinki, Finland, 18.06.2011.
Topic: The Business Case of Gender Diversity and the UN Women Empowerment Principles

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The Business Case of Gender Diversity and the UN Women Empowerment Principles

  1. Women EmpowermentPrinciplesand The ROI of Gender Equality<br /><br />Helsinki, 18.06.2011<br />
  2. AGENDA<br />1<br /><ul><li>Market Power of Women
  3. ROI of Gender Diversity
  4. Linking ROI to Women Empowerment Principles </li></li></ul><li>2<br />Women Influence Over 85% Of Global Consumer Decision Making<br />Consumer Markets are Female: <br />“The Customer is Queen“<br /> Source: "A Woman's Place is in the Boardroom", Peninah Thomson and Jacey Graham, Palgrave Macmillan, 2005, quoting: Peter Frost of Rethink Pink, <br />
  5. Women Love To Shop. Thats Not New.<br />3<br />
  6. 4<br />But also every second Hornbach client is female<br />Copyright Anke Domscheit<br />Unit of measure<br />Text<br />* Footnote<br /> Source: Source<br />
  7. Women’s Market Power As Private And Corporate Costumers Is Broadly Underestimated<br />5<br />WOMENbuy5.000.000 new cars p.a. in the EU<br />WOMENown 9.500.000 businesses in the EU<br />Every second US Purchasing Manager/Agent is Female<br /> Source: "A Woman's Place is in the Boardroom", Peninah Thomson and Jacey Graham, Palgrave Macmillan, 2005, ACEA, press research, Eurostat EU-27, 2005<br />
  8. 6<br />2000<br />05<br />10<br />15<br />20<br />25<br />30<br />35<br />2040<br />Quantitative Challenge: Drop Of 24 Mio In Active Work Force By 2036 If Female Employment Rate Does Not Change <br />Active workforce in Europe*<br />Millions<br />Trend if employment rates remain constant**<br />220<br />Trend if the female employment rate reaches that for men***<br />Today<br />210<br />Quantitative challenge due to demographic change<br />- 3 million<br />200<br />If employment rates remain constant, active workforce will decrease dramatically while demand for workers remains high<br />190<br />- 24 million<br />180<br />Increasing the female employment rate to that for men could compensate for the shrinking workforce population<br />0<br /> * Total population aged 15 - 65 years multiplied by employment rate (for EU-27 countries excluding Slovenia, Slovakia, and the Czech Republic and including Iceland, Norway, Switzerland, and Albania) <br /> ** Assuming 2005 employment level of women (56%)<br /> *** Basis: male employment rate of 2005 (71%)<br /> Source: Eurostat 2005, Global Insight 2000 - 2030, McKinsey “A wake up call for female leadership in Europe” 09/2007<br />
  9. 7<br />Qualitative Challenge: Demand For Highly Skilled Labor Will Increase Substantially<br />Thousands<br />German example: forecasted additional demand by educational level, 2020 relative to 2003<br />Career training not completed <br />-25% <br />Career training completed <br />Certificate as master/technician or vocation-al school diploma<br />Degree from college of applied sciences or university<br />+29% <br /> Source: IZA Research Report No. 9, 2007, p. 81, McKinsey: “A wake up call for female leadership in Europe”, 09/2007<br />
  10. „Half Of Potential Human KnowledgeIs In Female Heads“ (Thurow) – ItShould Not BeWasted!<br />8<br />„In mostwealthy countries, femalestudentsclearlyoutnumbermenatthetertiarylevel.“<br />„In Iceland, therearealmosttwiceasmanywomenenrolled in tertiaryeducationasmen.“ <br />„In the United States andtheRussianFederation, thereareabout 129 and 126 femalestudentsforevery 100 male students, respectively.“UNESCO Institute forStatistics, 2010<br />„More womenthanmen in U.S. earneddoctorates last yearforfirsttime.“„Women now hold a nearly 3-to-2 majority in undergraduateandgraduateeducation.“ Washington Post, 2010<br />„In today’sSweden 60% ofthosewhobeginuniversitystudiesarewomen.“Therearemorefemalebachelorlevelstudents (55%) andgraduates (59%) acrossthe 27 memberstatesoftheEU“University of Venus, 2010<br />Sources:;;; of Lester Thurow, Economist)<br />
  11. Macroeconomic Effects Of Unleveraged Female Talent lead to Limited GDP Growth – Now and in the Future<br />9<br />Macroeconomic Effects of Glass Ceilings are qualitative and quantitative in Nature<br /><ul><li>Limited GDP Growth
  12. Shrinking National Budgets
  13. Loweringcompetitiveposition relative toother countries</li></ul>Lost Returns on educational investments<br />Demographic change – shortage of talent in number and skill<br />Globalisation – competition of economies and regions<br />Copyright AnkeDomscheit-Berg,<br />
  14. Tom Peters:<br />10<br />Tom Peters:<br />Copyright Anke Domscheit<br />“If A Board Does Not At All Resemble The Market Being Served Than Something Big Is Badly Wrong”<br /> Source: "A Woman's Place is in the Boardroom", Peninah Thomson and Jacey Graham, Palgrave Macmillan, 2005, quoting: Peter Frost of Rethink Pink and Tom Peters<br />
  15. Women Are Underrepresented in Boards all overthe World – MissedEconomicOpportunities<br />Worldwide, only 2 countries havewomen‘ssharesofover 20% in supervisoryboardsofpubliclyquotedcompanies: NorwayandSweden.<br />11<br />Source: Corporate Women Directors International, in speachof Irene Natividadat 18.06.2011, bpw international congress, Helsinkii<br />
  16. GrowingNumberof Women GraduatesAlone Will Not Close Gender Gap in Board Rooms<br />12<br />Source: McKinsey „Women atthe top ofcorporations: Making ithappen“ – 2010<br />
  17. AGENDA<br />13<br /><ul><li>Market Power of Women
  18. ROI of Gender Diversity
  19. Linking ROI to Women Empowerment Principles </li></li></ul><li>14<br />10<br />Performance of companies with homogeneous leadership tends to be lower, because glass ceilings hinder companies to achieve:<br />Access to talent<br />Access to markets – reflect markets<br />Better grounded decisions<br />1<br />2<br />3<br />4<br />5<br />Higher creativity potential<br />Better corporate governance<br />Glass CeilingsHaveEconomic Impact On Company Level – Which Aggregates To National Impact<br />Number and skill level<br />1+1=3 Effects (Return on Diversity)<br />Copyright AnkeDomscheit-Berg,<br />
  20. Companies With More Women in ExecCommitteesPerformSignificantlyBetterComparedtoIndustry<br />15<br />Companies with 0 womenrepresentation in execcommittees in thatspecificsector1<br />Companies in top quartileforwomenrepresentation in execcommitteesvssector1<br />Average EBIT margin 2007-2009 3in Percent<br />Average Return on Equity 2007-2009 2in Percent<br />+41%<br />+56%<br />Note: 1 Top quartile: 25% ofthecompaniesofthesectorwiththehighestshareofwomen in theexecutivecommittee 2 ROE: Average calculated on 2007-2009 periodfor 279 companies 3 EBIT: Sample of 231 companies ; Banks, Insurance andfinancialserviceshavebeenexcluded; Scope: 6 European countries (UK, France, Germany, Spain, Sweden, Norway) andthe BRIC countries (Brazil, Russia, India, China)Source: McKinsey „Women atthe top ofcorporations: Making ithappen“ – 2010<br />
  21. McKinsey Measure On Organisational Excellence: Positive Correlation Between Performance And Share Of Women In Boards<br />16<br />Direction<br />Coordi-nation and control<br />Accounta-<br />bility<br />External orientation<br />Innovation<br />Leadership<br />Companies with min. 3 women in boards rank higher on EACH organisational performancecriteria**<br />Organisational performance links toeconomicperformance:<br />Top quartile OPP companiesmorelikelytohaveaboveaverage EBITDA<br />Capability<br />Motivation<br />Environment and values<br />highest improvement (4-7 pts)<br />Organisational Performance Profile*<br />medium improvement (3 pts)<br />slight improvement (1 pts)<br />* a proprietary McKinsey Tool<br /> ** Analysis conducted on a sample of 101 worldwidecompanies, or 58.240 personssurveyed<br /> Source: McKinsey, “Women Matter – Gender Diversity, a corporate performance driver”, 10 2007,<br />
  22. Women use 5 of 9 LeadershipBehavioursthatImprove Performance moreoftenthenMen, 3 belongto 4 whichaddressfutureneedsbest<br />17<br />% Respondentswhoseemajorgapbetweenneedsandprevalenceofbehaviour<br />% Respondents who rank behaviour as most effective for future needs*<br />Leadership Behaviours<br />Women and menapply equally<br />Women apply slightly more<br />Women apply more<br />Women and men apply equally<br />Menapplymore<br />* respondentscouldchoseupto 4 behaviours<br /> Source: McKinsey, “Women Matter 2 survey conducted on the McKinsey Quarterly global panel of 684 decision makers, Women Matter 2 ,2008<br />
  23. 18<br />Direction<br />Coordin-ation and control<br />Accounta-<br />bility<br />External orientation<br />Innovation<br />Leadership<br /><ul><li>In currentcrisis, leadersrankedDirectionandLeadershipasmostimportantcapabilitiesto manage corporateperformance.
  24. Bothbelongtofactors, mostpositivelyinfluencedbyhigherwomensshare</li></ul>Capability<br />Motivation<br />Environment and values<br />Women PositivelyInfluenceThoseCapabilities Most, Whichare Most Relevant in EconomicCrisis<br />highest improvement (4-7 pts)<br />Organisational Performance Profile*<br />medium improvement (3 pts)<br />slight improvement (1 pts)<br />Source: “Women leaders, a competitiveedge in and after thecrisis“ – Women Matter 3 – McKinsey, 09 2009<br />
  25. McKinsey: Managers Saw Lack ofFemaleLeadershipStrengths in RecentCrisis<br />19<br />Leadership skills more frequently found with women<br />Leadership skills more frequently found with men<br />Wehave not enoughoftheseleadershipskills (appliedmorebywomen)<br />-31%<br />-23%<br />+153%<br />+67%<br />But toomuchofthose...(appliedmoreby man)<br />Source: “Women leaders, a competitiveedge in and after thecrisis“ – Women Matter 3 – McKinsey, 09 2009<br />
  26. AGENDA<br />20<br /><ul><li>Market Power of Women
  27. ROI of Gender Diversity
  28. Linking ROI to Women Empowerment Principles </li></li></ul><li>UN Women EmpowermentPrinciples<br />Establishhigh-level corporateleadershipforgenderequality.<br />Treatall womenandmenfairlyatwork – respectandsupport human rightsandnon-discrimination.<br />Ensurethehealth, safetyand well-beingof all womenandmenworkers.<br />Promote education, trainingand professional developmentforwomen.<br />Implemententerprisedevelopment, supplychainandmarketingpracticesthatempowerwomen.<br />Promote equalitythroughcommunity initiatives andadvocacy.<br />Measureandpubliclyreport on progress<br />21<br />Source:'s_Empowerment_Principles.pdf<br />
  29. Most Gender DiversityMeasuresRecommended by McKinsey as Best Practice Mapto WEP <br />22<br />McKinsey Recommendations<br />Women EmpowermentPrinciple<br />Establishhigh-level corporate<br />leadershipforgenderequality<br />„Whengenderdiversityisatthe top ofthestrategicagenda, therearemoreactionstakenandmorewomenatthe C-level“ <br />„CEO andexecteamshouldvisiblymonitorprogressin gender-diversityprograms“ <br />„Inclusionof gender-diversityindicators in executives’ performancereviews“ <br />Source: McKinsey „Women atthe top ofcorporations: Making ithappen“ – 2010<br />
  30. McKinsey Research Shows Strong CorrelationBetween WEP #1 and Gender DiversitySuccess<br />23<br />Companies wheregenderdiversityis not on theagenda (n=5221)<br />Companies wheregenderdiversityisamong top 3 priorities on strategicagenda (n=1261)<br />Women EmpowermentPrinciple:<br />Establishhigh-level corporateleadershipforgenderequality<br />1 Fortheshareofcompanieswithmorethan 15% womenatthe C-level, the sample hasbeenreducedto 124 forcompanieswhereitis not on theagendaand 36 respondentsforcompanieswhereitis in the top-3 prioritiesSource: McKinsey „Women atthe top ofcorporations: Making ithappen“ – 2010 (based on Women Matter – Global Survey 2010)<br />
  31. McKinsey Recommends Strong Focus on Professional Development for Women – Maps WEP #4<br />24<br />McKinsey Recommendations<br />Women EmpowermentPrinciple<br />„Skill-buildingprogramsaimedspecificallyatwomen“ <br />Promote education, trainingand professional developmentforwomen<br />„Programstoencouragefemalenetworkingandrolemodels“<br />„Encouragementormandatesforseniorexecutivestomentorjuniorwomen“<br />„Systematicrequirementthatat least onefemalecandidatebe in eachpromotionpool“<br />Source: McKinsey „Women atthe top ofcorporations: Making ithappen“ – 2010<br />
  32. YouGetWhatYouMeasure – Old Management Receipt, recommendedby WEP #7 and McKinsey <br />25<br />McKinsey Recommendations<br />Women EmpowermentPrinciple<br />„Inclusionof gender-diversityindicators in executives’ performancereviews“<br />Measureandpubliclyreport on progress<br />„Indicatorsofthecompany’sperformance in hiring, retaining, promoting, anddevelopingwomen“<br />„Gender quotas in hiring, retaining, promoting, ordevelopingwomen“<br />Source: McKinsey „Women atthe top ofcorporations: Making ithappen“ – 2010<br />
  33. McKinseys Names 2 Measuresas Most Effective – Both Fit WEP<br />26<br />Copyright Anke Domscheit-Berg,<br />Combining UN Women EmpowermentPrincipleswithresearch on ROI forwomen in leadershipby McKinsey canhelp promote WEP in thecorporateworld. Itsthelanguage CEOs understand... <br />McKinsey – Women Matter 4: „Women atthe top ofcorporations: Making it happen“ (2010) <br />
  34. Facts toRemember<br />Women havesignificanteconomicmarket power – often (still) ignoredby male boardrooms<br />Wastingfemaletalenthas negative microandmacroeconomicimpact<br />McKinsey researchshows: Companies withmorewomen in executivepositions rank higher in businessperformance<br />Women‘suseleadershipstylesmoreoftenwhicharemostneeded in economiccrisisandtomeetfuturechallenges<br />Women empowermentprinciplesmap McKinsey recommendationsforsuccessfulimplementinggenderequality<br />Facts on Gender Diversity ROI help promote WEP<br />27<br />Copyright Anke Domscheit-Berg,<br />
  35. Questions? <br />Contact<br />Anke Domscheit-Berg<br />Founder &<br />Berlin, Germany<br />mailto:<br />Web:<br />Twitter: @anked<br /> @fempowerme (tweeting live from BPW congress! #bpw, #bpw11)<br />28<br />