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Mckinsey Women Matter
Mckinsey Women Matter
“Women Matter” is a study conducted by McKinsey & Company as part of its global
partnership with the Women’s Forum for the Economy & Society.
The study suggests that the companies where women are most strongly represented
at board or top-management level are also the companies that perform best.
Confirming the existence of the gender gap – most notably in the composition of
corporate management bodies – the McKinsey study offers fact-based insights
into the importance for companies of fostering the development of women in the
business arena, so that a greater number attain positions of high responsibility.
Finally, building on these insights and observations, and highlighting the main
barriers to female representation on management bodies, this study seeks to begin
the practical debate of how to make the transition from awareness of the situation
to the implementation of change.
Are women the future of business? The question is open …
Contents
i
WOMEN MATTER
Major economic potential
10 More women in business: an imperative for competitiveness
10 A response to the upcoming talent shortage in Europe
10 Women: a growing advantage for companies?
Conclusion
22 Going further?
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WOMEN MATTER
Too few
women
in business:
a persistent
reality
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WOMEN MATTER
Exhibit 1
Women represent only 11% of the membership of governing bodies of listed companies in Europe
Exhibit 1
Women represent only 11% of the membership of governing bodies of listed companies in Europe
Norway 32 %
Sweden 24 %
Bulgaria 21 %
Latvia 21 %
Finland 19 %
UK 12 %
Germany 11 %
France 8%
Netherlands 7%
Belgium 6%
Spain 4%
Italy 3%
Luxembourg 1%
EU average: 11% women
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WOMEN MATTER
Natural growth in the number merely raise the proportion of women
of women graduates is insufficient in top executive positions from 4% in
to bring about change 2005 to 8% by 2035 (Exhibit 2). Even
if these projections are applied only to
Gender inequality continues to exist in the academic channels that traditionally
management functions, and the increase in produce company managers (MBAs and
the number of female university graduates engineering schools, for example), the
will not itself be sufficient to close the gain in France would amount to just
gap. As shown by the linear projection 8 percentage points by 2035, with the
of the historic trends in numbers of proportion of female top executives rising
women graduates applied to women’s from 8% to 16%.
representation in top management
positions, unless the current rules of In essence, unless we address the root
the promotion system are changed, the causes of the problem, the notorious
growth in female graduate numbers will “glass ceiling” will stay firmly in place,
have a very marginal impact on women’s and women’s participation in corporate
representation on governing bodies. In leadership over the next 30 years will
Spain, for example, volume alone would remain low.
Exhibit 2
Exhibit 2
The increase in the number of female graduates will have a limited impact on diversity
The increase in the number of female graduates will have a limited impact on diversity
1978 61 % 2005 64 %
Sweden
2006 24 % 2035*** 25 %
1976 32 % 2005 61 %
Spain
2006 4% 2035*** 8%
1975 32 % 2005 49 %
Germany
2006 11 % 2035*** 17 %
1975 41 % 2005 58 %
France
2006 8% 2035*** 11 %
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WOMEN MATTER
A model which remains constraints may vary from one country
to another, depending on the support
predominantly male-oriented offered (infrastructures such as day-
care centres, tax policies that encourage
To gain an understanding of the main women’s participation in the labour force,
barriers that prevent women achieving etc.), but on average European women
top-management positions, we collated continue to devote twice as much time as
findings from the many studies in this area men to domestic tasks: 4 hours and 29
and interviewed more than 50 company minutes a day, compared with 2 hours
CEOs, men and women, throughout and 18 minutes for the men in our sample6
Europe. (Exhibit 3).
It emerges from this research that “The first question I am always asked by
while social policies can be more or less women students is how I manage to balance
favourable to women’s employment, my private and professional life”
corporate models – historically designed – Chairwoman of a media group
by men – form the pillars on which the
glass ceiling is supported.
The question arises of how compatible
the double burden – which is currently
The “anytime, anywhere” performance inherent in our model of society – is
model, irreconcilable with women’s with the demands associated with senior
double burden management. The dominant model in the
business world (or the one perceived as
The “double burden” syndrome – the such) equates leadership with unfailing
combination of work and domestic availability and total geographical mobility
responsibilities – weighs heavily. Women at all times (“anytime, anywhere”). The
remain at the centre of family life, with model also presupposes a linear career
all the attendant constraints (maternity, path, with no space for career breaks or
child-rearing, organising family life, care the rejection of a geographical mobility
of the elderly, etc). The impact of the offer.
Exhibit 3
Exhibit 3
European women devote on average twice as much time as men to domestic tasks
European women devote on average twice as much time as men to domestic tasks
2005 Women
Men
Time spent Difference between men
hours and women, minutes
Sweden 3:42 +73
2:29
Norway 3:47 +85
2:22
Germany 4:11 +110
2:21
Belgium 4:32 +114
2:38
UK 4:15
+117
2:18
France 4:30
+128
2:22
4:45
Poland 2:22 +143
4:55
Spain +198
1:37
5:20
Italy 1:35 +225
4:29
EU 15* average 2:18 +131
* Sweden, Norway, Finland, Germany, Belgium, UK, Latvia, France, Estonia, Hungary, Slovenia, Lithuania, Poland, Spain, Italy
Source: Eurostat
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WOMEN MATTER
“When, for personal reasons, I declined the
An added final handicap is that it appears
top job in an overseas branch, I was told I
was excluding myself from the system. It was
harder for women to find a mentor.
seen as career suicide” According to a Catalyst10 study of MBA
graduates, only 33% of the women
– Head of marketing, French subsidiary
of a leading European bank interviewed said that it was easy to
find a mentor, compared with 42% of
This dominant model is felt by women to men. And yet, 61%11 of women see the
be the main barrier to career advancement lack of mentoring as a barrier to career
and success, because it cannot be reconciled development, as opposed to 31% of men.
with the double burden. For example,
“On the same project, the men will
maternity leave and reduced mobility are demonstrate 100% ambition even if they only
seen as serious handicaps: in the US, 62% have 50% of the required skills, whereas the
of women perceive family or personal women will be concerned about only having
obligations as an obstacle to promotion7. 80% of the required skills”
Fully 96% of female graduates from – Board member of a banking group
France’s elite grandes écoles believe that
having children, or being of child-bearing All these facts underscore the difficulty that
age, is a real or perceived barrier for women experience in applying the levers
employers8. of in-company promotion with the same
effectiveness as their male counterparts.
If women are thus less naturally inclined Difficulty in identifying with success
than men to recognise – and appreciate –
their own performance, it is probably more A third major barrier that has emerged
difficult for them to assert their talents from our research involves the difficulty
and gain recognition in the company, and women have in identifying with success,
hence to capture every opportunity for which appears to hamper their profes-
promotion. sional development. The absence of female
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WOMEN MATTER
role models – seen as a barrier by 64% of fied women aspire to positions of power,
women in the US11 – is compounded by a against an average of 27% of men.
heightened per-
64% of women see the absence ception of the
of female role models as a barrier difficulty of Opting out: a real and serious reason
to their development achieving success for the gender gap in top management
in today’s busi-
ness environment. In France for instance, Ultimately, “opting out” – a voluntary
77% of women believe their career devel- decision to discontinue one’s career – is
opment faces barriers, a perception shared both the result of the barriers identified
by 49% of men12. and an additional cause of the shortfall
of women in corporate executive bodies.
Among the US college graduates surveyed
Lower ambitions by Harvard Business Review13, 37% of
the women voluntarily stopped working
Perhaps because of their perception of these at some point in their career, against 24%
barriers, women seem to have lower pro- of the men. One of the main reasons put
fessional ambitions than men. In fact, 48% forward by these women were the need
of men – according to a Harvard Business to spend more time with their family
Review survey13 (mentioned by 45%) (Exhibit 4). An even
Only 15% of highly qualified women – see themselves greater cause for concern is that out of the
aspire to positions of power, against as “extremely or 93% of women who have taken career
an average of 27% of men very ambitious”, breaks and intended to get back to work,
while only 35% only 74% have managed to do so, and
of women have a comparable self-image. only 40% have found full-time work.
Furthermore, only 15% of highly quali-
Exhibit 4
Career breaks for women are mainly motivated by the need to spend more time with family
Exhibit 4
Career breaks for women are mainly motivated by the need to spend more time with family
Proportion of US graduates*
who interrupt their careers Main factors behind career break decisions
Sufficient household
32 %
income
24%
Lack of job satisfaction 29 %
* Survey of 2,443 women and 653 men in the US, ages 28 to 55, who obtained a college degree with honours or a graduate degree
Source: Harvard Business Review 2005
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WOMEN MATTER
Major
economic
potential
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10 WOMEN MATTER
diversity programmes have had a positive Furthermore, capital markets and investors
impact on employee motivation for 58% are paying more and more attention to
of the companies that have implemented corporate performance in terms of gender
them, and on customer satisfaction for diversity. For instance, investment funds
57%, while 69% such as Calpers in the US or Amazone in
60% of new car purchases in Japan of the compa- Europe include this indicator among their
are influenced by women nies noted an investment criteria, while rating agencies
improvement in (Core Rating, Innovest, Vigeo) are now
their brand image. developing tools to measure gender
diversity.
Exhibit 5
Increasing women’s employment rate offers one possible response to the demographic challenge
Exhibit 5
Increasing women’s employment rate offers one possible response to the demographic challenge
Active workforce*
Million
210 –3 million
190
180
0
2000 05 10 15 20 25 30 35 2040
* Total population aged 15–65 years multiplied by employment rate (for the European Union – 27 countries excluding Slovenia, Slovakia and
Czech Republic and including Iceland, Norway, Sweden and Albania)
** Estimate based on employment rate of women in 2005 (56%)
*** Based on employment rate of men in 2005 (71%)
Source: Eurostat; Global Insight; McKinsey
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WOMEN MATTER 11
More women in control:
a corporate performance
lever?
To examine whether greater gender
diversity might correlate with better
economic performance, we conducted two
types of research on two cross-sections of
business.
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12 WOMEN MATTER
Exhibit 6
The level of organisational excellence is measured against nine criteria
Exhibit 6
The level of organisational excellence is measured against nine criteria
ACCOUNTABILITY COORDINATION
AND CONTROL
Design structure/reporting
relationships and evaluate Measure and evaluate
individual performance business performance
to ensure accountability and risk
and responsibility for
business results
EXTERNAL
ORIENTATION LEADERSHIP INNOVATION
Engage in constant two- Ensure leaders shape Generate flow of ideas so
way interactions with and inspire the actions that the company adapt
customers, suppliers, of others to drive better
or other partners performance
CAPABILITIES MOTIVATION
Ensure internal skills and Inspire and encourage
talent to support strategy employees to perform
and create competitive and stay
advantage
ENVIRONMENT
AND VALUES
Shape employee
interactions and foster
a shared understanding
* A proprietary McKinsey tool of values
Source: McKinsey
Exhibit 7
The best-ranked companies on organisational performance tend to have an operating margin and a market
Exhibit 7
capitalization more than twice as high as those of the lower-ranked ones
The best-ranked companies on organisational performance tend to have an operating margin
and a market capitalization more than twice as high as those of the lower-ranked ones
Probability of having…
Level of organisational
performance* … an above-average** EBITDA*** … an above-average** valuation****
Top quartile 68 % 62 %
Middle quartiles 48 % 52 %
Bottom quartile 31 % 31 %
X 2.2 X 2.0
* Quartiles based on the arithmetic average of scores obtained by 231 institutions, rated on 9 criteria by 115,000 employees
** Earnings Before Interest, Taxes, Depreciation and Amortization
*** Based on data either for the year of the survey or averaged over 3 years; the surveys were carried out at different times in different companies
over the last five years
**** Enterprise value to book value ratio
Source: McKinsey – OPP analysis
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WOMEN MATTER 13
outperform their sector in terms of return companies with a higher proportion of
on equity (11.4% vs an average 10.3%), women on their management committees
operating result (EBIT 11.1% vs 5.8%), are also the companies that have the
and stock price growth (64% vs 47% over best performance. While these studies do
the period 2005-2007) (Exhibit 9). not demonstrate a causal link, they do,
however, give us a factual snapshot that
What conclusions should we draw? These can only argue in favour of greater gender
statistically significant studies show that diversity.
Exhibit 8
Exhibit 8
Companies with three or more women in top management functions score more highly for each organisational
Companies with
criterion than three or
companies more
with women
no women intop
at the top management functions score more highly
for each organisational criterion than companies with no women at the top
51 +6 pts 63 +3 pts
Vision Motivation
57 66
Coordination 56 +5 pts 70 +1 pt
Capability
and control 61 71
68 +4 pts 64 +1 pt
Leadership 72 Accountability 65
52 +1 pt
Innovation
53
* Analysis conducted on a sample of 101 European companies, or 58,240 persons surveyed
Note : Given the sample size, a 1% difference is statistically significant
Source: McKinsey
Exhibit 9
Exhibit 9
Companies with a higher proportion of women in their top management have better financial performance
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-
diverse management teams*
management teams compared with their industry average
Industry average
47%****
5.8%
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14 WOMEN MATTER
Women’s path
to success:
what you need
to know
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WOMEN MATTER 15
Do women pay a higher price the corporate ladder, the fewer children they
for success? have, whereas the reverse is true for men.
In the 41–55 age range, for example, 49%
Two significant differences between the of the “best paid” women (over $100,000
men and women were brought to light by a year) are childless (compared to 19%
the study. of men), while the figure for “well paid”
women ($55,000 to 65,000 depending on
n First, 27% of women, versus 7% of men, age) is 33% (compared to 25% for men).
admit that they have felt discriminated
against during their professional career; This survey suggests that, in a male-centric
model, women who are today carving out
n The second difference is demographic, prime positions for themselves follow the
revealing a substantial disparity in the same path as men, and make the same
situations of the respondents: 54% of choices imposed by the dominant model
women in our sample – vs only 29% of – particularly that of putting career before
men – were childless, and 33% of the family. But it seems that this dilemma – the
women were single, compared to 18% choice between professional success and
of the men. work-life balance – has more consequences
for women, who might have to pay a higher
A Harvard Business Review18 survey price for success.
confirms that the higher women climb up
Exhibit 10
The career choices of middle and senior managers – men and women – are mainly influenced by their professional
Exhibit 10
environment and personal aspirations
The career choices of middle and senior managers – men and women – are mainly influenced
by their professional environment and personal aspirations
What were the factors that influenced the most crucial moment in your career*?
Percentage
Women
Men
Middle and senior managers Senior managers only**
87 81
Work environment
90 87
81 80
Personal circumstances
and aspirations
77 78
49 47
Family circumstances
42 43
* Survey of a representative sample of male (482) and female (409) middle and senior managers from around the world
** CEO, CFO, CIO, COO, CMO, managing director, board members and chairperson
Source: McKinsey
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16 WOMEN MATTER
Reinventing
the model?
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WOMEN MATTER 17
Exhibit 11
There is a correlation between women’s share of the total volume of hours worked and the presence of women in the
Exhibit 11
company’s top echelons
There is a correlation between women’s share of the total volume of hours worked
and the presence of women in the company’s top echelons
Percentage
Female leadership (share of women in corporate decision-making bodies), 2006
25
Sweden
Bulgaria
Latvia
20
Finland
Lithuania
15 Estonia
Hungary
UK Romania
Germany Denmark
r2 = 0.60*
10 Poland
France
Belgium Cyprus Portugal
Malta Netherlands Iceland
5 Austria
Ireland
Spain
Italy
0
25 30 35 40 45 50 55
Exhibit 12
Exhibit 12
The The public policy requirements vary from one country to another
public policy requirements vary from one country to another
UK
Portugal
Germany
France
Netherlands
Austria Belgium
Spain
Italy
Traditional-conservative Pro-family
Work-life balance
(Childcare, family support, employment rate of mothers)
Source: Eurostat; OECD; McKinsey
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18 WOMEN MATTER
Pursuing tried and tested initiatives their insights, we have defined four best
within the workplace practices for the development of gender
diversity.
To learn more about the most effective
initiatives, we interviewed a dozen “There are no miracle solutions for gender
companies notable for the progress they diversity; you just have to keep plugging
have made in women’s participation in the away with the tried and tested measures”
boardroom and in top management. From – HRD of a telecom group
WOMEN MATTER 19 i
2 - Implement measures to facilitate the work-life balance
Two types of measure are required:
lexible working hours. Flexibility (e.g. remote working, part-time work, flexitime) is not a women-
nF
only policy, but should form part of the general development of the company’s business model,
requiring the company to investigate how to adapt its organisation
Flexible working hours should
and culture. At a practical level, factors such as property costs
not be restricted to women alone
might encourage companies to make working from home a general
option, introducing a number of «mobile offices». The financial benefit for the company itself
would come on top of the benefit such a move would bring to its employees.
areer flexibility and support during breaks – not just for one day, one week or one year
nC
but throughout a career. The fact that women tend to take career breaks needs to be taken
into account to prevent any negative impact on their career paths or pay. 58% of female
graduates questioned by Harvard said their careers were not linear and only 5% of women
looking to return to work after a break want to go back to their previous employers13. This gives
a measure of just how far business needs to change.
Maternity leave is the biggest career break, and needs active management to ensure that
women go back to work. The companies that manage maternity leave best retain contact
throughout the period, have personal meetings before and after to ensure their employees are
properly reintegrated into the workforce, and keep a watchful eye on pay rises and bonuses in
the years following return. Some companies go even further, sending their managers brochures
explaining what to do, or producing dedicated training modules.
Exhibit 13
Exhibit 13
Interviews with companies with significant results in terms of gender diversity revealed four best practices
Interviews with companies with significant results in terms of gender diversity revealed
four best practices
Work-time 5
1 Mentoring
flexibility
Investigate how to 4
internally adapt the
company’s
2
Promo-
tion organisation and 3 Coaching
Recrui- Pay culture and training
ting levels
Women 1 Make sure recruitment
% includes female candidates
Satis- Turn- and interviewers
faction over
2 Check that the appraisal Networking
Training Career system is neutral and
flexibility performance centred
Source: McKinsey
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20 WOMEN MATTER
3 - Adapt the human resources management process
At the same time, companies must ensure that their recruitment, appraisal and career
management systems do not hold women back in their professional development. The process
for identifying high-potentials often focuses exclusively on managers between the ages of 28 and
35; to avoid potential opting outs, for instance, it could be altered to incorporate more flexible
criteria, such as the number of years of service in the company, in order to make allowance
for periods of maternity leave. Looking beyond the reengineering
“No ‘one size fits all’ ... it’s always got
of processes needed, human resource functions have an essential
to be tailored, case by case, for men
role to play in sensitising front-line managers and spotting potential
and for women”
women candidates. When it comes to promotion, many managers
– Chairwoman of the board of a holding
now suggest having at least one woman on every shortlist. Some
of an international company
firms, such as JP Morgan, have organised training for recruiters and
operational managers to make them aware of the importance of diversity and to identify prejudices
that affect their decisions. Finally, the company must be in a position to offer personalised career
paths, in order to retain the best talent. Flexibility in the management of human resources goes
hand in hand with flexible working time, as advocated above.
WOMEN MATTER 21 i
Conclusion:
Going
further?
“Very few women study engineering so very
few apply for the engineering positions I
offer and therefore I hire very few women”
– CEO of a company in the transport
industry
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22 WOMEN MATTER
Sources
1
Share of women in tertiary students, EU-27, Eurostat (2004)
2
Employment rates, EU-25, Eurostat (2005)
3
“Report on equality between women and men”, 2004 data, European Commission (2006)
4
“Chiffres clés 2006, l’égalité entre les femmes et les hommes”, data for 2003 (share of women) and 2004
(pay gap), Service des Droits des Femmes et de l’Egalité (2006)
5
European Commission statistics, Executive Boards (2006)
6
“A statistical view of the life of women and men in the EU-25”, data for 15 countries, Eurostat (2006)
7
“Women in Leadership: A European Business Imperative”, Catalyst-Conference Board (2002)
8
“Le parcours professionnel des diplômés des Grandes Ecoles : regards croisés hommes / femmes”, Ipsos / GEF
(2007)
9
“More women at the top :The Impact of Gender Roles and Leadership Style”, Alice H. Eagly, in Gender: From
Costs to Benefits, ed. U. Pasero, Wiesbaden: Westdeutscher Verlag, 2003, pp. 151-169
10
“Women and the MBA: Gateway to opportunity”, Catalyst (2000)
11
“Women in Leadership: A European Business Imperative”, Catalyst – Conference Board (2002).
12
“Le parcours professionnel des diplômés des Grandes Ecoles : regards croisés hommes / femmes“, Ipsos /
Grandes Ecoles au Feminin (2007)
13
“The Hidden Brain Drain - Off Ramps and On Ramps in Women’s Career”, Sylvia Ann Hewlett, Carolyn Buck Luce,
Peggy Schiller, HBR Research Report, Harvard Business Review 83 (March 2005): 31-57
14
Altema, publ. Resis. According to the study “Think tank: marketing to women”, by Peter Crush, 83%
of consumer goods purchases in the US are made by women
15
Nissan
16
Estimate based on the number of people between 15 and 74 with IT skills, according to OECD statistics
17
“Cost and Effectiveness of Diversity”,European Commission, 2003
18
“ExecutiveWomen and the Myth of Having It All”, Sylvia Ann Hewlett, Harvard Business Review 80 (April 2002):
66-73
19
“A Wake-Up Call for Female Leadership in Europe”, McKinsey & Company (June 2007), Claudia Funke,
Anke Domscheit , Katrin Suder
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WOMEN MATTER 23
Authors
Additional contributors
McKinsey & Company – France
Hélène Chatillon, Business Analyst
Cécile Kossoff, Communications Manager
Chantal Pommier, Communications Advisor
Brigitte Brami, Computer Graphics Designer
Acknowledgements
To all the companies we interviewed for this study
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24 WOMEN MATTER
Women Matter
Copyright © 2007 McKinsey & Company, Inc.