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Women Matter.
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Madrid, March 2013
McKinsey & Company | 1
Women matter Storyline
2007 2008 2009 2010 2012
Gender diversity: a corporate
performance
driver
Female leadership: a competitive
edge for the
future
Women at the top of corporations: Making it happen
Women leadership: a competitive
edge in and
after the crisis
Making the breakthrough
McKinsey & Company | 2
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 management teams compared with their industry average
10,3% +10%11,4%
Average ROE2
2003-2005
5,8%
+48
11,1%
Average EBIT3
2003-2005
47%4 X1,7
64%
Stock price growth4 2005-2007 compared with Eurostoxx 600
sectorial indexes
Companies with most gender-
diverse management teams1
Industry average
1 89 companies, identified with the scoring system developed by Amazone Euro Fund
2 87 companies, data not available for two companies
3 73 companies, financial sector not included
4 Of the 89 most gender-diverse companies, 44 have a market capitalization greater than 2 billion euros
SOURCE: Amazone Eurofund database: Amadeus; Research Insght; Datastream; Bloomerg; McKinsey
McKinsey & Company | 3
Criteria of Organizational Performance Profile (OPP)
2008 - Female leadership : why does it matter?
McKinsey & Company | 4
2008 – Female leadership : Key traits (1/2)
Leadership behaviors…
Participative decision making
Role model
Inspiration
Expectations and rewards
People development
Intellectual stimulation
Efficient communication
Individualistic decision making
Control and corrective action
… improve organizational 1performance dimensions
1 If more frequently applied on average
2 Indirect impact
Work environment and values
Leadership team
Direction Motivation
Accountability
Leadership team Capabilities2
Work environment and value
Innovation
Direction
External orientation
Coordination and control
SOURCE: Bass&Stogarts Handbook of Learship, B. Bass, 1990; McKinsey analysis
McKinsey & Company | 5
2008 – Female leadership : Key traits (2/2)
On average, women use five of the mine leadership behaviors that improve organizational performance more often than men, particularly the first three
Frequency gap in behaviors between men and women1 (%) Leadership behaviors
1 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<0.05
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
C. Johannesen- Schimidt, 201
NOTE: 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. Eagly's 2001 meta-analysis)
Women apply more
Women apply slightly more
Women and men apply equally
Men apply more
Women apply more
Women apply slightly more
Women and men apply equally
Men apply more
1
1
4
4
7
9
4
People development
Expectations and rewards
Role model
Inspiration
Participative decision making
Intellectual stimulation
Efficient communciation
Individualistic decisio making
Control and corrective action
Not statistically significant
Not statistically significant
McKinsey & Company | 6
2009 – Women leadership: a competitive edge in and after the crisis
Women more frequently adopt the two types of leadership behavior seen as most important in and after the crisis
… managing in the crisis2
Types of leadership behavior1
Women apply more
Women apply slightly more
Women and men apply equally
Men apply more1
Women apply more
Women apply slightly more
Women and men apply equally
Men apply more1
15
9
26
35
34
48
31
47
20
Intellectual stimulation
Control and corrective action
Individualistic decisio making
Participative decision making
Efficient communciation
Inspiration
Role model
Expectations and rewards
People development
1 From analysis in Women Matter 2, 2008
2 Women Matter 3 global survey, September 2009 (n= 763 respondents; CXO level, senior management, middle managements)
Respondent selecting behavior as most important for…Percent
… post-crisis peformance2
12
10
20
41
36
45
25
47
21
McKinsey & Company | 7
Where are we in 2010?
McKinsey & Company | 8
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
5
6
7
8
10
12
13
15
15
27
32
Brazil
Russia
Spain
UK
Germany
Norway
Sweden
France
US
China
India
Woman representation in corporate boards in 2010…Percent
Evolution since 2007Percentage points
SOURCE: McKinsey proprietary database, 2010; US: Catalyst, 2009 census, Fortune 500 Women Board Directors (2009)
NOTES: 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)
0
+3+3
NANA
+7+7
+2+2
0
+6+6
NANA
NANA
NANA
NANA
McKinsey & Company | 9
2010 – Women at the top of corporations: A deeper look
Gender diversity in executive committees of corporations in 2010
2
8
6
11
6
14
2
7
14
17
12
China
India
Brazil
Russia
Norway
Spain
UK
Germany
France
US
Sweden
Woman representation in corporate boards in 2010…Percent
SOURCE: McKinsey proprietary database, 2010; US: Catalyst, 2009 census, Fortune 500 Women Board Directors (2009)
NOTES: 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)
McKinsey & Company | 10
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
SOURCE: McKinsey proprietary database, 2010; US: Catalyst, 2009 census, Fortune 500 Women Board Directors (2009)
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 trends
2%
7%
6%
17%
32%
32%
41%
61%
4%
9%
18%
11%
64%
55%
60%
55%
1978
2010
1975
2010
1976
2010
1975
2010
1978
2010
1975
2010
1976
2010
1975
2010
Sweden
France
Spain
Germany
McKinsey & Company | 11
2010 – Women at the top of corporations: Making it happen
CEO commitment
Women’s indivi-dual development programs
Collective enablers
Not statistically significant2
Measure implementation effect on women representation1
Number of points
10
11
12
13
17
18
19
22
▪ Systematic requirement that at least one female candidate be in each promotion pool▪ Inclusion of gender-diversity indicators in executives’ performance reviews ▪ 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 women
SOURCE: 2010 Women Matter global survey, September 2010
Measure
▪ Visible monitoring by the CEO and the executive team of the progress in gender-diversity programs
▪ Skill-building programs aimed specifically at women
▪ Encouragement or mandates for senior executives to mentor junior women
▪ Performance evaluation systems that neutralize the impact of parental leaves and or flexible work arrangements
▪ Options for flexible working conditions (e.g., part-time programs) and or locations (e.g., telecommuting)
▪ Support programs and facilities to help reconcile work and family life (e.g., childcare, spouse relocation)
▪ Assessing indicators of the company’s performance in hiring retaining, promoting and developing women
▪ Gender-specific hiring goals and programs
1 Difference between the proportion of companies with more than 15% women at the C-level depending on whether the measure is implemented or not 2 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 seniority
The most effective measures promoting gender diversity focus on women’s development and appraisalN = 3553, C-Level respondents
McKinsey & Company | 12
2012 – Walking the talk
SOURCE: Women Matter 2012; McKinsey
Management commitment
Women’s development
programs
Collective enablers
40%
▪ Group CEO’s commitment
▪ Executive committee
▪ Targets for women's representation
in top positions
▪ Consistency of company culture
with gender diversity objective
Gender diversity indicators▪ Gender representation overall
and at certain job levels
▪ Gender representation in
promotion rounds
▪ Promotion rates by gender at
different levels of seniority
▪ Attrition rate buy gender
▪ Networking programs/elements
dedicated to women
▪ Leadership skill building
programs
▪ Use of external coaches
▪ Mentoring programs/events
with internal mentors
▪ Programs to increase
proportion of potential women
leaders
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 leave
40% of companies have 50% of measures in place in all 3 parts of the ecosystemExamples of gender diversity measures in each part of the ecosystem
Number of companies = 235
McKinsey & Company | 13
Showing commitment
SOURCE: Women Matter 3 global survey, September 2009
Budget
8
69
6
4
7
2
522
38
21
16
21
15
2
No change
They have been given higher priority
They have been given lower priority
They have received more attention
They have received less attention
They have received more funding
They have received less funding
Impact of the crisis on gender diversity programs (n-144)1
Impact of the crisis on all employee programs (n-150)
1 This questions was not asked to respondents that selected “No specific measures”
2 The trends are identical in the total respondents sample
Level of attention from top management
Level of priority in the organization
Budget
Impact of the crisis on gender diversity programs and on all-employee programs (companies having gender diversity as a top-ten priority2 )
The economic crisis has not had the same impact on women’s programs as it has had on programs for all employees
McKinsey & Company | 14
2012 – Government support
SOURCE: European Commission; Eurostat; 2010 Catalyst Census
0
1
2
3
4
5
6
7
8
9
10
0 1 2 3 4 5 6 7 8 9
Women’s position in workplace Average of indicators: board representation of women; women’s share of men’s working hours; employment rate of women
Government supportAverage of indicators: number of children in child care;
government expenditure on family/children as percentageof GDP; proportion of men working part-time
Norway
Denmark
Sweden
NetherlandsUK
Findland
France
Belgium
Germany
Italy
Czech Republic
Spain
Correlation between government support and women’s position in the workplace Number of countries = 12
McKinsey & Company | 15
Midway execution
Infrastructure, e.g., child care facilities 4314
HR processes and policies 5025
Indicators 5618
Mentoring programs/events 6916
Leadership skill building programs 4713
Networking programs/events 5815
Consistency of company culture with diversity objectives
8822
Targets for women’s representation in top positions
5124
CEO commitment 9241
Well implemented1
Fairly well implemented2
In place3
1 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 1-5
2 Scored 4 (management commitment 3)
3 Scored 2 or 3 (management commitment 2)
SOURCE: Women Matter 2012: McKinsey
Management commitment
Women’s development programs
Collective enablers
Gap between measures in place and good implementation Percent, number of companies = 235
McKinsey & Company | 16
2012 – Positive (though slow) impact
Women’s representation on executive committees and corporate boards by country 2007-111
1 The 2011 figures are mostly derived from 2010 annual reports
Executive committees Percentage of total, 2011
Corporate boardsPercentage of total, 2011Country
SOURCE: Analysis based on annual reports of companies listed on each country’s main index and press searches.
Italian data provided by Alberti Governance Advisors
3
6
8
8
8
11
11
15
21
10
Germany
Italy
Czech Republic
France
Netherlands
Belgium
United Kingdom
Norway
Sweden 8
3
8
4
3
4
0
1
2
6European average
16
5
10
20
19
11
16
35
25
17
3
4
5
12
12
-2
2
5
5
Growth since 2007
Percentage points
1
McKinsey & Company | 17
2012 – Making the breakthrough
Average percentage of women at various organizational levelsNumber of companies 1301
1 Companies with more than 10,000 employees and/or revenues greater than €1 billion, and that provided data
SOURCE: Women Matter 2012; McKinsey
22
14
9
2
37Total company
Middle management
Senior management and vice president
Seats on executive committee
CEO
5.0x
Odds of advancement
for men over those
for women
1.7x
1.8x
2.1x