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What we know—and what everyone needs to know—about the quest for equality.

In 2007, when women held 11 percent of seats on the executive committees of Europe’s leading companies, McKinsey published its first Women Matter report. It not only argued for greater gender diversity in corporate management but also suggested how to achieve that goal.

Since then, we have vastly extended the scope of our research, publishing more than 20 reports that have shaped the debate on gender equality in the workplace around the world. But there remains an uncomfortable truth. While progress has occurred in the intervening years, it remains too slow. In 2017, on average, women accounted for 17 percent of corporate-board members and 12 percent of executive-committee members in the top 50 listed G-20 companies (Exhibit 1). Even more worrying, perhaps, is that many people are content with the status quo. According to our Women in the Workplace 2017 study, conducted with LeanIn.Org and one of the largest of its kind, almost 50 percent of men think that it is sufficient when just one in ten senior leaders in their company is a woman. One-third of women agree.

In 2017, representation of women on corporate boards and executive committees is still far from parity, although it varies widely by country.

Despite this slow progress, our understanding of the challenge has forged ahead. Of the lessons learned, at the top of the list must surely be how hard the problem is to crack. To help concentrate efforts and encourage the many companies striving to make progress on diversity, this article summarizes what our decade of research has taught us about the case for change, the barriers that prevent it, and the solutions required for achieving it.

The case for change

Our research has examined both the impact of having more women in senior-management positions on business performance and the potential for greater female participation in the workforce to unlock growth in the global economy.

Correlations with company performance

Many companies strive for gender equality because it is the right thing to do, a point made most recently in our 2017 report Women Matter: Time to accelerate—Ten years of insights into gender diversity, by Janina Kugel, a member of the managing board of Siemens. “It is important to clearly state that discrimination is neither accepted nor tolerated, and to leave no room for ambiguity,” she says. But McKinsey also put forward a business case in its early research. A global survey of 279 companies conducted in 2010 found that those with the greatest proportion of women on their executive committees earned a return on equity 47 percent higher than did those with no female executive members.

Of course, a correlation does not prove causation, and some academics have disputed what they regard as the intuitive appeal of a link between diversity and performance. Nevertheless, a growing body of research by McKinsey continues to strengthen that link. Our 2018 Delivering through diversity study of more than 1,000 companies in 12 countries found a correlation between diversity at the executive level and not just profitability but also value creation. Those companies in the top quartile for gender diversity were 27 percent more likely to outperform their national industry average in terms of economic profit—a measure of a company’s ability to create value exceeding its capital cost—than were bottom-quartile companies (Exhibit 2). There was also a penalty for lack of diversity more broadly. Companies in the bottom quartile on both gender and ethnic diversity were least likely to record higher profits than the national industry average (Exhibit 3).

Lack of gender and ethnic diversity in executive teams was associated with relatively weaker profitability.

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Here is a direct link to the complete article.

Sandrine Devillard is a senior partner in McKinsey’s Montreal office, Vivian Hunt is a senior partner in the London office, and Lareina Yee is a senior partner in the San Francisco office.

We would like to acknowledge the contributions made by numerous McKinsey colleagues in the course of our decade of research. They are too many to mention all, but their efforts in developing our understanding of gender inequality in order to promote change are deeply appreciated. Key to the latest research cited in this article include Georges Desvaux, Kweilin Ellingrud, Alexis Krivkovich, Eric Labaye, Anu Madgavkar, Kelsey Robinson, Sandrine Sancier-Sultan, and Irina Starikova.