The power of parity:

Advancing women’s equality in Asia Pacific

CONFIDENTIAL AND PROPRIETARY

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October 2018

VIVIAN HUNT – MANAGING PARTNER, UK & IRELAND

McKinsey invests considerably on the topic of gender parity in Asia-Pacific

Delivering the

power of parity:

Toward a more

gender-equal

society May 2016

The power of

parity:

Advancing

women’s

equality in India November 2015

The power of

parity: How

advancing

women’s equality

can add $12

trillion to global

growth September 2015

Women Matter:

An Asian

PerspectiveJune 2012

Women in

leadership:

Lessons from

Australian

companies leading

the wayNovember 2017

Delivering

through diversityJanuary 2018

Globally, advancing women’s equality in work offers a significant GDP growth dividend

Full-potential scenario

$28 trillion

~60% from workforce participation

~20% from shifting mix towards full-time work

~20% from sector mix and productivity

Best-in-region scenario

$12 trillion

11% increase in global GDP if every country achieved the

fastest rate of progress in its region on three key gender gaps

SOURCE: McKinsey Global Institute analysis

trillion$4.5▪ 12% more GDP in 2025

▪ Size of Germany and Austria combined

▪ 60% from labour-force participation

Asia Pacific’s opportunity is

All Asia Pacific countries can achieve a greater than 5 percent increase in GDP from accelerating

progress towards gender parity

SOURCE: ILO; World Input Output Database; Oxford Economics; IHS; national statistical agencies; McKinsey Global Growth Model; McKinsey Global Institute analysis

1 Adjusted opportunity based from latest ILO data on hours working.

5-9% 10-15% 15%+

Incremental 2025 GDP from improving gender equality at the best-in-region rate, %

India

Pakistan

Sri

Lanka

China

ThailandCambodia

Vietnam

Australia

New Zealand

Indonesia

Malaysia1

Myanmar

Philippines1

Nepal

South Korea

Japan

Singapore

Bangladesh

Our Gender Parity Score (GPS) allows country and regional comparisons across four categories

and 15 indicators

Work

Essential services and

enablers of economic

opportunity

Legal protection and

political voice

Physical security and

autonomy

Equality in societyEquality in work

SOURCE: The power of parity: How advancing women’s equality can add $12 trillion to global growth, McKinsey Global Institute, September 2015.

0.550.450.40

0.70

0.40

0.50 0.60 0.65

0.50

0.70 0.800.75

0.75

0.55

0.85 0.900.20

0.25

0.30

0.35

0.45

0.60

0.65

0.80

Gender equality in work,Gender Parity Score

Gender equality in society Gender Parity Score

Across countries, gender equality in society is strongly linked with gender equality in work

>50,000

<5,000

5,000-10,000

10,000-15,000 25,000-50,000

15,000-25,000

Per capita GDP

SOURCE: The power of parity: How advancing women’s equality can add $12 trillion to global growth, McKinsey Global Institute, September 2015.

Every region is some distance away from gender parity

(achieving a score of 1.00 across the 15 indicators)

Middle East and

North Africa

0.56

0.57

0.67

0.48

0.64

Asia Pacific

Sub-Saharan

Africa

Western

Europe

Eastern Europe

and Central Asia

Latin

America

North America

0.73

0.71

Gender Parity Scores (GPS), 2016

Level of gender inequality

Extremely

high

0–0.5

High

0.5–0.75

Medium

0.75–0.95

Low

0.95–1.0

SOURCE: McKinsey Global Institute analysis

We found four common themes throughout Asia Pacific: labour-force participation, business

leadership, access to digital technology, and attitudes about women’s roles

Low labour-force

participation in quality jobs

Underrepresentation of

women in business

leadership positions

Uneven access to digital

technology

Entrenched attitudes about

women’s role in society

and work

Women account

for only There are

When a woman works for

pay,

of the workforce—below the

global average

37% 1 in 5

is held by a womanpositions

At manager level

and above,

unconnected women

in low- and middle- income

countries in Asia Pacific

1.1 billion over 70%

her children suffer

of Indians believe

Bottlenecks in the talent pipeline vary among countries

Percent of women1

Potential major bottlenecks in pipeline

(~50% drop from previous stage of

pipeline, except

for enrollment stage)

xx

SOURCE: McKinsey proprietary database 2015; Women in Leadership Australia 2017; World Bank; published reports

1 Women as a percentage of the total men and women at the respective stage of the funnel. Does not include data on women entrepreneurs.

2 Entry positions in jobs occupied by graduates.

3 Managerial (mid-level) positions in rank. Comparable middle-management data are not available for Southeast Asia.

4 Company management/executive committee (CEO and direct reports to CEO).

5 Increase in proportion due to leg! mandate for one woman board member for all listed companies..

China

Australia

India

Indonesia

Japan

Philippines

Singapore

52 53 51 22 11 10

57 56 44 36 21 18

44 43 25 16 4 115

51 52 45 N/A 13 5

47 46 49 9 1 3

55 53 43 N/A 33 15

51 53 49 N/A 25 8

Tertiary

education,

enrolled

Tertiary

educated,

graduates

Entry-level

professionals2

Middle

management3

Senior

management4

Board

members

ESTIMATES

HOW TO DRIVE CHANGE

There has been significant progress in Asia Pacific over the past ten years

Maternal mortality Education Labour-force participation

Bangladesh, Cambodia, India, and Nepal

reduced maternal mortality by more than

100 deaths per 100,000 live births

Female-to-male ratio improved by 0.06 in

Malaysia, but declined by 0.08 in India

▪ India improved literacy ratio by 0.10

▪ Cambodia and Nepal improved

secondary school enrolment ratio by

more than 0.20

▪ Almost every country’s tertiary

enrolment ratio increased

All countries improvedSome countries made modest improvements, others lost ground

Most countries improved, and many made significant strides

Gender equality in Asia Pacific can improve through contextual elements such as

economic development, and forces that catalyse change Contextual elements that

influence gender equality

Gender equality indicators

in MGI’s framework

Gender

equality

in

society

Attitudes

and

beliefs

Gender

equality

in work

Economic

development

Catalytic

forces

▪ Per capita GDP

▪ Urbanisation

▪ Building social infrastructure

▪ Education

▪ Maternal mortality

▪ Government measures

▪ Technology

▪ Market forces

▪ Activism

▪ Equality in employment

▪ Labour-force participation

▪ Equality in unpaid care work

▪ Essential services

and enablers of

economic

opportunity

▪ Legal protection

and political voice

▪ Physical security

and autonomy

SOURCE: McKinsey Global Institute analysis

At the corporate level, increasing gender and ethnic diversity in executive teams is a

significant performance opportunity

Difference between 1st and 4th quartile likelihood of financial performance1

above national industry median

Percent

Delivering through Diversity

(2018)

Gender

Diversity

Ethnic

Diversity2 33%

21%

Why Diversity Matters

(2015)

15%

35%

The link between profitability and diversity on executive teams continues to be

statistically significant...

…and so does the penalty for the least diverse

companies

Q4

on both

40

57

Q1-Q3

on either

-29%

Likelihood of financial performance1 above

national industry median, by diversity quartile3

Percent

1 Average EBIT margin, 2011-15; 2 Varies by geography, but in most cases includes all non-white ethnicities. In the US, we also include Hispanic/Latino of any race. In Singapore, we include only people of Malaysian decent; 3 Executive gender diversity

analyzed for 991 companies in all regions. Executive team ethnic diversity data analyzed for 589 companies all regions except Australia. France, Germany, India, Japan and Nigeria ;

SOURCE: McKinsey “Delivering Through Diversity” (2018)

More women in the corporate pipeline is associated with a greater share of female

executives, but overall representation of women remains low

227 6

-70%-9%

45

15 11

-67%

-27%

4021 30+42%

-48%

8 13

ExecWHC3 BoD

Average % women’s representation

by company level

Labor-force

participation

F/M ratio1

Share of

labor

force

Share of

graduates

Australia and

Singapore have the

highest levels of female

representation at whole

company and

leadership levels

Women remain greatly

underrepresented in

India and Japan at all

levels

Pipeline representation of women, %

7644512

342438

694343

824657

1 Ratio of female-to-male labour force participation based on the percent of the total population ages 15 and over

2 Only includes graduates of bachelor’s programs 3 No whole company data available for India

SOURCE: McKinsey Diversity Matters Database; World Bank, 2016 ILO estimates; Australia Dept. of Education; Singapore Dept. of Statistics; India Census

We identified five regional potential priorities across Asia Pacific to improve the state of gender

equality

Capture the economic and social benefits of improving women’s access to digital

technology

Shift attitudes about women’s role in society and work, in order to underpin

progress on all aspects of gender equality

Collaborate on regional solutions (e.g., financing, knowledge sharing) as powerful

catalysts for gender equality

Focus on higher female labour-force participation in quality jobs as a priority to boost

economic growth

Address the pressing regional and global issue of women’s underrepresentation in

business leadership positions

Companies across the region are starting to implement best practices tailored to their

specific economic and cultural context

Stated

objectives

Initiatives

implemented

SOURCE: Company websites and interviews

▪ Met target of 50% women in leadership in

2017, from initial target of 40% set in 2010

▪ Harness different views and experiences

to drive innovation and serve clients

▪ CEO’s Balanced Scorecard includes

gender diversity, and D&I KPIS cascaded to

other executives’ scorecards

▪ Appointed dedicated Head of Diversity

▪ Tailored “Diversity Action Plans” for

individual business units, working

alongside HR to ensure alignment of D&I

initiatives and discuss progress

▪ Commitment to inclusion and diversity starts

from the top of the organisation and

cascaded down

▪ Diversity mix and I&D initiatives tied to the

value driver of improving customer

insight, linking it to the business strategy

▪ Tailoring I&D initiatives to local context:

o Emphasis on meritocracy and

preserving male buy-in

o Factoring in cultural norms about

balancing work and lifestage for female

colleagues

EXAMPLE

Key takeaways on the gender equality opportunity in Asia Pacific

Many opportunities for action by policy makers, companies,

and NGOs within countries and through regional

collaboration

At least 5% economic gain for all countries, and more than

10% for nearly half of them

Progress made in the past decade—but still a way to go. Asia

Pacific has high gender inequality, but with large variation

among countries

Four top issues to solve: women’s labour-force participation,

business leadership, access to digital technology and societal

attitudes

A $4.5 trillion GDP opportunity by 2025, or 12% over

business-as-usual GDP—primarily from increasing labour-

force participation of women

1

2

3

4

5

Thank you and Questions