Intersection: Taking it to the top

DELIVERING ON DIVERSITY, GENDER EQUALITY, AND INCLUSION

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In this issue, we look at the pressures facing working women, ways to bridge the opportunity gap, and the new faces at the top.

THE ZEITGEIST

In the room

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The North Star. Last week, the US government began sending COVID-19-vaccine doses directly to some community health centers. Public-health experts have applauded this as good news for the millions of patients these centers serve, most of whom are low income or identify as racial or ethnic minorities. As Dr. Marcella Nunez-Smith, head of the new COVID-19 Health Equity Task Force, explained: “Equity is our North Star here.” Nunez-Smith, a Yale epidemiologist, warned that “we cannot get this pandemic under control if we do not address head-on the issues of inequity in our country. There is no other way.” McKinsey analysis has shown that Black Americans are almost twice as likely to live in counties that are at highest risk of health and economic disruption from the coronavirus. Long-standing health inequities are contributing to the pandemic's disproportionate impact on communities of color. Nunez-Smith added that it's important to “acknowledge a shameful history in our country of medical experimentation on Black and brown bodies in particular.”

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Called to account. Whitney Wolfe Herd, Bumble's 31-year-old founder and CEO, just became the youngest woman to take a company public. At Bumble, she is far from an “only”: the company's leadership team is mostly female, and eight of its 11 board members are women. Board diversity correlates with better financial performance, and boards are now expected to weigh in on a variety of cultural issues, including diversity. But white men continue to occupy the majority of seats; Nasdaq itself has remarked on the “noticeable lack of diversity.” (Women make up about one-fifth of US corporate managing boards.) As Nasdaq's CEO explained in a recent McKinsey interview, the exchange has proposed a new rule that would require listed companies to have at least one female director and one minority or LGBTQ+ director—or to explain why they are coming up short.

THE FACTS

Under pressure

More than 35 million additional Americans could experience mental-health and substance-use challenges due to the pandemic. Women in particular have been drinking more; according to a Rand Corporation study, the frequency of heavy drinking among American women rose by more than 40 percent in 2020 as compared with 2019. And American women are not alone in facing challenges: a recent McKinsey survey found that across 11 countries, women were 1.5 times as likely as men to have experienced a significant mental-health challenge during the pandemic. McKinsey's latest Women in the Workplace research shows that companies need to do more to support women employees—especially mothers, senior-level women, and Black women. Companies can address employee stress by increasing paid leave, offering remote-work stipends, adjusting performance-review criteria, and updating employees on their productivity expectations. Listen to our recent McKinsey Podcast to learn more about the pandemic's behavioral-health consequences and how employers can create a culture of support.

THE FIX

Banking on women

Promotion paths

Men still make up most of the management ranks at banks and insurers, and the problem starts early: McKinsey research shows that women who work in financial services are nearly 25 percent less likely than their male peers to attain their first promotion. Women of color are particularly disadvantaged; they are about 35 percent less likely than men in financial services to make their first promotion, and they face a 90 percent drop-off from entry level to the C-suite. Deanna Strable, the CFO of Principal Financial Group, once told us that “the lack of women in C-suite positions is a self-perpetuating cycle” because “young women don't see role models or potential paths toward executive-level leadership.”

A Wall Street first

This month marks the start of Jane Fraser's tenure as CEO of Citigroup, the third largest bank in the United States. Fraser's appointment follows a similar first in Canada: Rania Llewellyn was appointed CEO of Laurentian Bank, one of Canada's top eight banks, in late October 2020. McKinsey has found that sponsorship is critical to the advancement of women in financial services. Companies can address the early-career gender gap by debiasing performance reviews and holding managers accountable for gender parity. Women of color cannot be overlooked in these efforts, especially given the sector's sweeping influence—and its importance in advancing equity across society.

THE VIEW

“I know for sure that what put my life on a different trajectory was that someone intervened to give me an opportunity, to close that opportunity gap, and that opportunity gap is still there.”
- Kenneth Frazier

Following the killing of George Floyd, Frazier—who is soon to retire as CEO of Merck—told CNBC's Squawk Box that businesses need to step up and “use every instrument at their disposal” to help eliminate the systemic barriers that Black Americans continue to face. Where to start? Frazier points to job training and internship programs as powerful ways for companies to help young Black Americans gain economic access. Businesses should not ignore the issue in times “when the community is quiet,” Frazier says. “In the long run, what's in our enlightened economic self-interest is for all Americans to feel like they're participants in our economy.”

THE TAKEAWAY

The Nigerian American economist Dr. Ngozi Okonjo-Iweala will be the first woman and the first African to lead the World Trade Organization. In a 2019 interview with McKinsey partner Acha Leke, the former Nigerian minister of finance reflected on Africa's many sources of opportunity—including its young, dynamic population—and on the role of women on the continent. It would take more than 140 years for Africa to reach gender parity at the current pace—but if business leaders look carefully, Okonjo-Iweala says, they will see that women are playing critical roles throughout the economy. She underscores that leaders need to examine their supply chains when designing a business to make sure they're not leaving value on the table by overlooking women.

The case is clear: “It is a business proposition—that women are there in the economy. They are providing value. They work really hard. They are reliable. And therefore, if you're a business, you must engage the women.”

— Edited by Julia Arnous, an editor in McKinsey's Boston office

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