Women Matter 2012 Making the...

March 20, 2012

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Women Matter 2012Making the Breakthrough

EUROPEAN RESULTS



McKinsey has been researching about the impact of g ender diversity at the top of corporations for many years and has published 5 “Women Matter” studies

SOURCE: McKinsey

2007

Women Matter Gender diversity, a

corporate performance driver

Positive link between a company’s performance

and the proportion of women in its governing

body

2008

Women Matter 2 Female leadership, a competitive edge for

the future

Reasons behind better performance: certain

leadership behavior is more displayed by women

2009

Women Matter 3 Women leaders, a

competitive edge in and after the crisis

Certain leadership behaviors typically adopted

by women are critical toperform well in the post-

crisis world

2010

Women Matter 4 Women at the top of corporations: Making

it happen

Majority of leaders recognize the impact of

gender diversity on business performance but

this belief does not translate to actions

2012

Women Matter 5 Making the

Breakthrough

Helping companies to build on what they have already

achieved to realize the final breakthrough

Average return on equity2007-2009

Average EBIT margin 2007-2009

15%

22%

+41%

11%

17%

+56%

Companies with a higher proportion of women in thei r executive committees have better financial performance

Companies in the top quartile for the women representation in executive committees

Companies with 0 women in executive committees

SOURCE: McKinsey

Women’s representation on executive committees and corporate boards is still limited and did not dramatically increased over the past years …

Executive committeesPercentage of total, 2011

Corporate boardsPercentage of total, 2011

Growth since 2007Percentagepoints

European average

Country

Growth since 2007Percentagepoints

8

3

8

4

3

4

0

1

6

2

1

3

4

5

12

12

-2

2

5

5

SOURCE: Analysis based on annual reports of companies listed on each country’s main index, and press searches. Italian data provided by Aliberti Governance Advisors

1 The 2011 figures are mostly derived from 2010 annual reports

3

6

8

8

8

11

11

15

21

Czech Rep

10

Germay

Italy

France

Netherlands

Belgium

United Kingdom

Norway

Sweden

16

5

10

20

19

11

16

35

25

17

34

20

17

9

0

Seats on executive committee

CEO

Senior management and vice president

Middle management

Total company 49

22

13

9

0

50

30

18

11

7

27

19

15

10

9

25

16

15

11

0

… And the problem exists at all hierarchical levels, not only topmanagement

1 Companies with more than 10,000 employees and/or revenues greater than €1 billion, and that provided data

Average percentage at different organizational leve ls in Europe, by sector

Number of companies = 1301

Energy, basic materials, diversified industries

Transport, logistics, tourism

Consumer goods

Financial services

Media, telecommuni-cations, technology

SOURCE: McKinsey

Building a whole gender-diversity ecosystem is crit ical

Developing women as leaders…

Mentoring

Training and coaching

Networks and role models

CEO and executive team's visible monitoring of progr ess in gender-diversity programs

CEO commitment

HR processesand policies

Gender-diversityindicators Infrastructure

… supported by collective enablers

Gender diversity on top of the strategic agenda

40% of companies have 50% of measures in place in all 3 parts of the ecosystem

40% Managementcommitment

Women’sdevelopment

programs

SOURCE: Women Matter 2012; McKinsey

• 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

• Group CEO’s commitment• Executive committee commitment• Targets for women’s representation

in top positions• Consistency of company culture

with gender diversity objectives

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 by gender

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)• Program to smooth transition before, during, and after maternity leave

Examples of gender diversity measures in each part of the ecosystem Number of companies = 235

Collective enablers

40 %

33

14

36

33

20

41

8 12

Don’t know

Not on the strategic agenda

On the strategic agenda, but not in top 10

Among top 10 itemson strategic agenda

Among top 3 itemson strategic agenda

2011

0

20101

3

Percentage of respondents, number of companies = 235

1 The 2010 figures are from the Women Matter 2010 survey. There were 1,560 respondents to this survey

x 1.9

In addition, more companies see gender-diversity as a top strategic priority than they used to in 2010

SOURCE: McKinsey

There is a gap between the measures in place and th ose that are “well implemented”

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 an 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)

Women’sdevelopmentprograms

Collective enablers

Percent, number of companies = 235

Management commitment

Well implemented1

Fairly well implemented2

In place3

CEO commitment

"Targets for women's representation in top positions"

"Consistency of company culture with diversity objectives"

Networking programs/events

Leadership skill building programs

Mentoring programs/events

Indicators

HR processes and policies

Infrastructure, e.g., child care facilities

88

51

92

69

47

58

43

60

56

24

22

15

13

16

18

25

14

41

SOURCE: McKinsey

While CEO commitment remains high and visible, it do es not cascade to lower management levelsPercent, number of companies = 235

29

32

28

2232

39

8 1120

41

100

13

Senior managers and vice presidents

25

CEOs

100

Middle managers

Not in place

In place

Well implemented

100

Fairly well implemented

SOURCE: McKinsey


The gap in implementation level may explain why com panies do not yet collect the benefits of their efforts

20% (top quartile)

Operating with a diversity advantage

Limited diversity practices

Making progress with diversity

Investing in diversity, but no impact yet

1 Companies with more than 10,000 employees and/or revenues greater than €1 billion, and that provided data for women at these 2 levels

13% (average)

Percentage of women at executive committee and senior management/vice president level

Number of measures

N = 65%

N = 1613%

N = 2016%

0

5

10

15

20

25

30

35

40

45

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

N = 8166%

25%

SOURCE: McKinsey

Percentage of measures judged to be well implemented 40,517,0

What counts: management commitment, tracking, culture, and diligent implementation

1 Companies with more than 10,000 employees and/or revenues greater than €1 billion, and that provided data2 On a scale of 1 - 4 where 4 is well implemented

Top management commitment2

Company culture aligned with gender diversity objectives2

Number of indicators used to track female representation

Gender diversity on CEO’s agenda2 2,91,8

1,63,0

3,11,7

6,0

3,0




SOURCE: McKinsey

In order to make the breakthrough, the good impleme ntation of initiatives depends upon four fundamental elements

Make senior management more visible

Target initiatives

Know thenumbers

Tackle mindsets

Make change happen:

Invest on whatcounts most

SOURCE: McKinsey

PSA BENCHMARK RESULTS



40%

20%

40%

Other Industry

Car manufacturersEnergy, Basic Materials & Environment

Quantitative sampleN=20, 70% belonging to their country main index

45%

13%

42%Other Industry

Car manufacturers

Energy, Basic Materials & Environment

Sample description

Country sample European Industry sample

Qualitative sampleN=40, 43% belonging to CaC 40

Quantitative sampleN=31, 44% belonging to CaC 40

Qualitative sampleN=31, 65% belonging to their country main index

7%

14%

29% 17%

29%

Services

Telecom, media, technology

Industry Financial services

Consumer goods (including food services & healthcare)

5%

12%

21%10%

26%

Services

Telecom, media, technology

IndustryFinancial services

Consumer goods (including food services & healthcare)

Note: Industry sample at European level (benchmark on : Belux, Czech Republic, France, Italy, Netherlands, UK) – as of December 2011

SOURCE: Women Matter 5 survey

Female representa-tion trend

▪ Overall, share of women in your company has been stable between 2008 and 2010 (22%)

▪ You did not communicate the historical share of women at other levels

Company commitment to gender diversity

▪ Gender diversity, is one of the top 3 priorities of PSA, with visible commitment from your CEO and all layers of management

▪ You perceive your company's culture as actively fostering gender diversity

Implement-ation of concrete actions to promote female repre-sentation

▪ PSA has a high level of implementation of gender related indicators and HR processes and policies

▪ Your company has a higher level of implementation of infrastructures that support private life than country's and industry's averages

▪ The level of implementation of women development programs is low compared to both the country's and the industry's levels


PSA Peugeot Citroën French participants (all sectors)European participants in the

industrial sector

COUNTRY AND INDUSTRY ANALYSIS ARE BASED ON WM5 SAMPLE

▪ The majority of companies say they are very committed to gender diversity (57%), and 52% have quantitative targets for women representation at top management. Commitment slightly decreases along the management line

▪ 45% of the companies report to have a culture that either actively fosters gender diversity or is best in class

▪ In your country, diversity initiatives are reported as being well implemented on gender related indicators and HR processes and policies

▪ Less initiatives are implemented in the areas of women development programs and infrastructures

▪ More than half of the companies say their management is committed to gender diversity (58%), commitment slightly decreases along the management line

▪ More than one third of the companies (38%) report to have a culture that either actively fosters gender diversity or is best in class

▪ European companies of your industry say their most implemented actions are in the area of gender related indicators and neutral HR processes and policies, focusing on controlling biases and retaining top performers

▪ Other dimensions like women development programs and infrastructures are less implemented

▪ Women are underrepresented at all senior executive levels

▪ Between 2008 and 2010, respondents report a share of women in executive committees that has evolved by 2 pts, but share of women at all other levels did not evolve

▪ Women are underrepresented at all levels, with only 19% women overall

▪ Situation has almost not evolved since 2008

Summary of findings (1/2)

Impact of concrete actions on diversity

▪ You identified as your next priorities :

– Consistency of company culture with your gender diversity objectives

– Gender conscious promotion

– Support of work-life balance


▪ Companies of your industry identified as next priorities : – Support to work-life balance– Commitment of management to

gender diversity– Programs to increase share of

women in the talent pool– Consistency of company culture

with gender diversity objectives

PSA Peugeot Citroën French participantsEuropean respondents in the

industrial sector

▪ Companies of your country identified as next priorities : – Commitment of management to

gender diversity– Support of work-life balance– Programs to increase share of

women in talent pool

Conclusion for you

▪ In your next priorities, you plan to reinforce measures that are already well implemented. In which case, you could focus on enforcing and monitoring the application of these measures on the ground, in particular, middle management commitment to gender diversity, and HR processes and policies which appear to be a concern for your managers in the web survey

▪ Going forward, you could further focus on developing and enriching your women development programs :

– Set up tailored mentoring programs with internal mentors

– Set up programs to increase share of women in the talent pool

– Develop your women leadership skill building programs and increase women participation to it

– Extend the perimeter of the women coaching sessions

▪ Share of women overall (22%) is low compared to your country average (41%) and in line with your industry average (21%)

▪ Shares of women at N-3 and N-2 level are low compared to your country's and industry's averages

▪ Share of women at N-1 level is relatively in line with your industry's average (7% vs. 9% in your industry)

▪ Good share of women overall, but drop happens already at N-3 level

▪ Drop in women representation is lower at transition to N-2 and to N-1

▪ In total, women representation drops by 70% between overall employees and executive committee

▪ Women are underrepresented at several levels in your industry :

– Low representation of women overall (about 20%)

– Women representation drops at N-3 level then remains stable at N-2 level

– A steep drop (by almost half) happens at N-1 level

Next steps and priorities for gender diversity ecosystem

Summary of findings (2/2) COUNTRY AND INDUSTRY ANALYSIS ARE BASED ON WM5 SAMPLE

Women representation in leadership position is almo st unchanged since 2008 in your country


2008 - 2010, Share of women, percent

You Your country Nb. Respondents: 10

373738

181717

121111 1010

8

000

2008 09 2010

CEO

Overall

N-3

N-2

N-1

222222

8 7 7

0

2008 09 2010


2008 - 2010, Share of women, percent

You Your industry Nb. Respondents: 8

191919

131313 131212

778

000

2008 09 2010

CEO

Overall

N-3

N-2

N-1

222222

8 7 7

0

2008 09 2010

Women representation in leadership position among respondents from your industry remained stable as w ell


PSA is part of companies investing in gender diversi ty without collecting fully the benefits of their efforts

20% (top quartile)

Operating with a diversity advantage



Investing in diversity, but no impact yet

1 Companies with more than 10,000 employees and/or revenues greater than €1 billion, and that provided data for women at these 2 levels

13% (average)

Percentage of women at executive committee and senior management/vice president level

Number of measures

N = 65%

N = 1613%

N = 2016%

0

5

10

15

20

25

30

35

40

45

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

N = 8166%

25%


In your company women representation drops steeply at N-3 level


2010, Share of women, percent, N=31/country, N=20/industry

Overall

N-3 to the CEO in leadership positions


Board

CEO


Share of women in your company

41%

23%

16%

11%

0%

15%

22%

8%

7%

7%

0%

17%

Share of women in your country

Share of women in your industry

21%

17%

12%

9%

0%

11%

0%

96%

91%

38%

0%

68%

69%

56%

0%

73%

72%

82%

xRepresentation drop/increase between two levels1

1 Increase if x>100% - drop if x<100%

Gender diversity indicators


Women develop-mentprograms

Women development programs



You are committed to gender diversity and have high levels of implementation on dimensions like gender diversity indicators and HR processes and policies

Percentage of answers per score, N=40/country and N=31/industry

Country

Industry

You


Current ecosystem based on the qualitative survey

25

23

25

20

50

57 1

1

100

High level of implementation

Low level of implementation

NA

60

58

57

20

32

30

9

20

11 1

1 51

35

9

9

89

36

56 1

5

11

36

36

79

54

52

7

8

14

10 3

2

33

64

57

50

30

17

22

12 1

11 3

NB: For commitment to gender diversity, “low level of implementation” is equivalent to a score of 1 (on a scale from 1 to 4), “average” is equivalent to a score of 2, and “high” to a score of 3 or 4. For the other segments, “low level of implementation” is equivalent to a score of 1 or 2 (on a scale from 1 to 5), “average” is equivalent to a score of 3, and “high” to a score of 4 or 5

Collective enablers

Commitment to gender diversity

Infrastructures

CEO and executive team's visible monitoring of progress in gender-diversity programs

Networks and role models, Training, Coaching, Mentoring, Talent pools

Neutral appraisal systems, policies for talent pool, …

Support to private life tools, mobility support, …

Monitoring of gender-related indicators (recruitment, promotion, compensation, …)


Infrastructures





You implement nine out of the ten most implemented measures of your country and industry benchmarks

N=40/country, N=31/industry – % of companies that have a solid implementation

Country

% of companies with a score of 4 or above

Top ten most implemented actions 1 Industry


Measures for which your score is 4 or above

84

86

67

55

70

52

52

36

36

52

1 among women-specific programs, HR policies, indicators and infrastructures

95

81

72

68

68

65

58

56

54

53

▪ Guarantee to keep similar or better position when returning from a leave of absence

▪ Career flexibility (leave of absence, possibility to alternate part-time and full-time period)

▪ Mobility administrative support (relocation, children schools)

▪ Gender diversity indicators

▪ Personalized career path for potential future women leaders

▪ Control over gender recruiting biases

▪ Control over gender appraisal biases

▪ Program to smooth transition before, during and after maternity leave

▪ Programs to increase the share of women in the talent pool

▪ Actions to increase share of women applying and accepting positions

▪ Dedicate one ExCom session to reviewing women profiles with high potential

▪ Have each ExCom member define his/her own quantified objectives and action plan on gender diversity, and

report regularly to the CEO on this topic

▪ Have the best country/BU in terms of gender diversity take on the role of model to inspire and disseminate best

practices

▪ Organize monthly events (e.g., lunch, breakfast, work groups) with at least one ExCom member to exchange on

gender diversity related topic


▪ Create a talent pool specific for women

▪ Have different age criteria for men and women for entering talent pool to take into account maternity related gaps

▪ Systematically invite women of the Talent pool to all management events to increase their visibility/networks

▪ Create a specific training program for women returning from maternity leave

▪ Create a specific training program with content such as corporate strategy, proactive work-life balance, leadership

skills development, etc.

▪ Give mentoring/coaching opportunities with Excom members and/or well known women leaders from outside the

firm


▪ Run regular analysis, at the right level of granularity on salary differences between men and women, understand

differences and follow-up action plan to reduce differencesGender diversity indicators


Examples of specific initiatives in your country (1 /2)

▪ Have temporary availabilities in daycare system to ensure extra solutions for parents in case of emergency

▪ Give possibility to pregnant women to adapt working hours

▪ Create a women network around maternity related issues (administrative questions, etc.)

▪ Work on HR policies : – Adapt standard career plans to make them accessible to women (e.g., limit mobility in dangerous

geographical zones where women's safety cannot be guaranteed)

– Pay 100% of salary during maternity leave (social security covers up to a certain level)

– Suppress "prorata temporis" system for bonuses during maternity leaves (bonuses depend on objectives being reached at the end of the year, not on how the objectives are reached or the amount of time necessary)

▪ Adapt HR processes :– Have managers explain their employees evaluations during evaluation committees as a way to suppress

biases

– Create a global charter on HR processes that contains guidelines and principles on gender diversity with indications on how to understand and adapt them depending on local particularities

– Implement an anonymous process for people (men or women) who have comments/suggestions/complaints on gender diversity related issues

▪ Train and communicate :– Organize trainings for managers to suppress biases during evaluations

– Include in the actions done in schools a section on gender diversity as being part of the company social responsibility

– Organize gender conscious events for students (e.g., dedicated to women, projects with at least 50% women) as a long term recruiting strategy


Infrastructures


Examples of specific initiatives in your country (2 /2)


Women develop-mentprograms




Infrastructures




Support to private life tools, mobility support, …


Low level of implementation

High level of implementation





Infrastructures

Projected ecosystem for PSA Peugeot Citroën based on the next priorities that were indicated in the qua litative survey

1 3 54 2

1 3245

Women respondents

Men respondents

Percentage of answers for each score

Ranking of priorities according to the senior execu tives of PSA that participated to the web survey Average ranking of the importance of each dimension according to women and men respondents, N=528 respondents

100 60 20 20 8911 7 93 33 17 50

You plan reinforcements focusing on neutral HR proc esses and policies

360°view of possible next actions for your company

Next priorities of respondents in your country

Next priorities of respondents in your industry

Your next priorities according to your qualitative questionnaire

Actions that you don’t do yet, and are not your next priority

Top actions

▪ Support to work-life balance▪ Gender conscious promotion▪ Commitment of management to gender diversity▪ Women mentoring program

▪ Increase consistency of company culture with gender diversity objectives▪ Establish more gender conscious promotions▪ Support of work-life balance


▪ Comprehensive women leadership skill building programs with high participation articulated around:– Tailored mentoring program with internal mentors– Program to increase share of women in talent pool– Monitoring of conversion rate between the different levels

of seniority by gender– Job-search program for the spouse/partner

▪ Programs to increase share of women in talent pool▪ Commitment of management to gender diversity▪ Consistency of company culture with gender diversity▪ Support of work-life balance

March 20, 2012



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