women matter epwn 03 12

Women Matter.

CONFIDENTIAL AND PROPRIETARYAny use of this material without specific permission of McKinsey & Company is strictly prohibited

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


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


Criteria of Organizational Performance Profile (OPP)

2008 - Female leadership : why does it matter?


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


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



Men apply more

1

1

4

4

7

9

4

People development


Role model

Inspiration



Efficient communciation

Individualistic decisio making


Not statistically significant

Not statistically significant


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



Men apply more1

Women apply more



Men apply more1

15

9

26

35

34

48

31

47

20



Individualistic decisio making


Efficient communciation

Inspiration

Role model


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


Where are we in 2010?


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


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


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)


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


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


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


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


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


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


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


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


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

women matter epwn 03 12

Documents

women matter

genderdiverse companies

gender diversity programs

share of women

percentage of women

crisis mckinsey company

gender management teams

female leadership