Diversity Matters – Time to

Accelerate

Maria Albonico

January 2018

McKinsey & Company

Gender parity: a macro and micro case for change

Janina Kugel

Women represent

50 percent of the

population, they

should make

50 percent of the

contribution to the

world, to the society,

to the economy.

50% of the world's working

age population

37% of global GDP

25% in management

positions

+ $12 TRILLION

could be added

to global GDP

39% of the global labor

force

240 million workers could be

added to the global labor

force by 2025

Angel Gurria

Women are at least as

well-educated as men

in most OECD

countries, and half of

this potential is not

used. This an

enormous waste:

women have so much

to contribute!

Average return on equity

Average EBIT margin

Companies in the top quartile for female

representation in executive committees

Companies with 0% women in executive

committees, or in bottom quartile

22%

15%

+47%

55%

45%

+21%

33McKinsey & Company

Women tend to be in less productive sectors and lower paid jobs

Mostly

male

Mostly

female

Near

parity

Energy/

Water

Agriculture/

FishingPublic

Admin/

Education/

Health

Other

Services

Manufac-

turing

Construction Banking/

Finance/

Insurance

Distribution/

Hotels/

Restaurants

Transport/

Comm-

unication

HighLow

Sector productivity, GVA

Occu

pati

on

al skill &

pay l

evel, £

00

0s

Associated

Professional/Technical

Managers, Directors

and Senior Officials

Professional

Administrativeand Secretarial

Skilled Trades

Caring, Leisureand Other Services

Sales and Customer

Service

Process/Plant/Machine Operatives

Elementary

occupations

Low

High

McKinsey & Company

In the G20, women make up 17% of corporate

boards and 12% of executive committees

Corporate boardsPercentage of total,

2017

Executive

committeesPercentage

of total, 2017

Evolution

since 2007Percentage points

30

25

17

10

30

13

14

6

15

4

6

8

5

-1

39

Germany

Italy

28

31

United Kingdom 25

Netherlands 27

Belgium

33

Sweden 34

France

9

15

23

14

17

15

21

Slow progress in Europe since 2007

Representation of women on corporate boards and

executive committees in the G20

2017, %

2

77

101212

20

22

25

27

30

3

8

10

28

20

40

0

15

1010

20

30

3535

15

5

0

5

30

25

40

2523

7.26.5

Indo

nesi

a

13.0

Bra

zil

14

Ø 12

Sou

th A

fric

a

Indi

a

17.0

UK

21.6

16.9

US

A

Can

ada

Fra

nce

Aus

tral

ia

13.6

33

39

22.4

Ger

man

y

Italy

15.3

8.6

2.6

Ø 17

2.2

1

Japa

n

6.8

6.2

Sou

th K

orea

Sau

di A

rabi

a

16.7

19.4

Mex

ico

20.0

Tur

key

Arg

entin

a12.0

2.0

Rus

sia

Chi

na

17.7

EU

Boards Executive Committees

Christine Lagarde

Clearly, the progress we have seen over the last ten

years is not enough. We did a study with the World Bank

and discovered that 90 percent of 150 countries we

surveyed have discrimination against women in their

legislative frameworks.

McKinsey & Company

SOURCE: 2017 McKinsey and LeanIn.Org Women in the Workplace study

Nearly 50% of men think women

are well represented in leadership

where only one in ten senior leaders

is a woman

Remarkably 33% of women agree

We do not all see that there is an issue –

this is particularly true for men

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Ambition is not THE problem! Corporate culture matters to fix barriers in performance

and leadership models

Thomas Buberl

The women I meet at AXA are not less

ambitious than their male counterparts.

The difference is that they do not express

their ambition the same way.

“Over the course of my career,

I have the desire to reach a top-

management position

Senior and mid-level managementAgree and strongly agree

81% 79%

“I am confident I will succeed in

reaching a top-management

position”

Mid-level managementAgree and strongly agree

2x Corporate culture

is twice as important as

individual mind-sets

in building women’s confidence

that they can reach a top

management position

76% 58%

“Is having children compatible with a top-

level career?" Agree and strongly agree

"It is compatible

for women"

62% of the

respondents

"It is compatible

for men"

80%of the

respondents

Barriers in the performance …

Only 43%of men in senior management positions

strongly agree that women are as good

leaders as men versus

76% of women

… and leadership models

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Implementation matters!

Gail Kelly

Leadership matters. Anyone serious about diversity has

to put real weight and grit behind it. Doing this right

requires taking a strategic approach to implementation,

focusing on both 'hard-wiring' and 'soft-wiring' elements.

US companies that say

they use clear criteria for

hiring, evaluation and

promotion vs. employees

who see them in practice

Companies

93%

Employees

57%

In Europe,

% of men and women employees who...

Think their company is doing

what it takes to improve

gender diversity

12%

Do not know how to act on

gender diversity

62%

In Europe, over 50% of companies have implemented gender

diversity measures, but only half of them are making real

progress with diversity

In the United States, companies are struggling to put

their commitment into practice

McKinsey & Company

Leaky pipelines at each stage: different challenges require different actions

Isabelle Kocher

As a business, various

initiatives can be taken to

ensure women are

represented at each level

of the organization. For

example the setting of

specific and public

targets. (…) But there is

another issue, which calls

for different solutions:

how do we increase the

number of women at the

first end of the pipeline in

STEM-related fields?

Shobana Kamineni

I think each obstacle

requires a different

thought process. The

most basic step in

India is to help the

rural uneducated

women. Illiteracy is

not acceptable, we

should aim for 100%

literacy. And from

there you move

towards different

calibrated responses,

from skills training to

entering the

workforce to

providing an enabling

and fair environment.

Gender representation in the corporate pipeline in 2016Percent of employees by level

Each sector has its own challengesNumber of companies = 103

49

22

13

9

0

50

30

18

11

7

27

19

15

10

9

25

16

15

11

0

34

20

17

9

0

Seats on executive

committee

Middle management

CEO

Senior management

and vice president

Total company

Financial

services

Media,

telecom,

technology

Consumer

goods & retail

Transport,

logistics,

tourism

Energy

and basic

materials

McKinsey & Company

Change will happen only if men and

women step up

Takeshi Niinami

Men sometimes feel gender

diversity programs are unfair. (…)

As a CEO I believe that CEOs need

to promote intentionally more

women. It takes time to provide the

evidence to the entire organization

that gender diversity has value. It is

a CEO commitment and requires a

huge determination.

Michel Landel

Because it’s a man’s world, we need to

convince men that it’s the right thing to

do not only for society but also for

companies. Therefore we launched an

extensive survey a couple years ago at

Sodexo (…). We found that the sweet

spot for us was to have a

diverse/gender balance population

between 40-60 percent, and within

that we have better results in all

our indicators.

28%

5%

“Even with equal skills and

qualifications, women have much

more difficulty reaching top-

management positions than men

do”

Disagree and strongly disagree

49%

Men unaware

of the difficulties

for women (28%)66%

Men aware

of the difficulties

for women (68%)

“Having too many gender-diversity measures or initiatives to promote

women leaders is unfair to men”

Agree and strongly agree

54%

Christine Lagarde

Engaging men is key! When discussing gender balance (…) men

often consider it is a threat to their job, masculinity, and virility.

This journey should be about enlarging horizons and making

society better for all.

McKinsey & Company

Acting at all levels, implementing a comprehensive ecosystem, and

learning from best-in-class companies

It takes

3-5 years to see the impact of

gender diversity

programs Persistence

Corporate change happens via system-

wide transformations

Best in class all had:

Management

Commitment

Holistic change program

on the strategic agenda

Justin Trudeau

To make gender equality

a reality, we need to start

by making it a priority in

everything we do.

Best-in-class companies’

CEOs put gender

diversity 2.4 times more often on the top 3 of

the strategic agenda

60% of the CEOs in best-

in-class companies

are fully committed to

diversity versus

47% in others

A comprehensive diversity

ecosystem is required

11

How do

companies

move to and

stay at the top?

12

Four imperatives for building a successful inclusion and diversity strategy

SOURCE: McKinsey Diversity Matters II

Commit and cascade 1

Link I&D to growth

strategy 2

Craft initiative portfolio 3

Tailor for impact 4

▪ Value drivers

▪ Diversity mix

▪ Data & analytics

▪ Local adaptation

▪ Cross-industry/sector collaboration

▪ Prioritised initiatives

▪ Inclusive culture

▪ Metrics and tracking

▪ Compelling CEO vision

▪ Management accountability

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Case studies illustrate how leading companies put these steps into practice

SOURCE: McKinsey Diversity Matters II

Commit and cascade ▪ Compelling CEO vision

▪ Management accountability1

▪ Value drivers

▪ Diversity mix

▪ Data & analytics

Link I&D to growth strategy2

▪ Local adaptation

▪ Cross-industry/sector

collaboration

Tailor for impact4

▪ Prioritised initiatives

▪ Inclusive culture

▪ Metrics and tracking

Craft initiative portfolio3

Working to build software capabilities

that improve workplace diversity for both

its own use and for customers

Requires gender parity in recruitment

and succession planning

Put metrics in place to track the impact of

I&D efforts at different levels of the talent

pipeline and on business performance

Set 40% target women senior execs and

ties 10% of executives’ bonus to

achieving I&D goals

McKinsey & Company

All leading companies we reviewed made building a culture of inclusion a

priority

These companies

view inclusiveness

as key to unlocking

the benefits of

diversity

▪ Defining what inclusiveness means

for their context, and why it’s

important

▪ Introducing policies and formal

processes to monitor and promote

inclusiveness

▪ Developing individual and team

capabilities to reinforce it

▪ Role-modelling inclusiveness at all

levels

▪ Sticking with it over time

McKinsey & Company

Final thoughts

A one size fits most formula A bespoke formula which will deliver

in your company’s specific context

Diversity just because it’s the

right thing to do...

Diversity as the right thing to do and as

an enabler of inclusive growth and

longer-term value creation

From… To…

Increasing representation of

women and ethnic minorities

at the top...

Increasing representation of women and

diverse profiles in decision-making

roles, combined with a corporate culture

of inclusiveness

16

Questions

17