Inadequate career development has kept women from reaching the top rungs of the corporate ladder, according to a report set to be released Tuesday by management consulting firm McKinsey & Co.
The report, which examines barriers to women's advancement in corporations, is primarily based on a 2011 survey of 2,525 college-educated men and women, including 1,525 individuals employed by large companies, mainly in management.
Despite efforts by major companies, just a handful of women have ascended to the leadership pinnacle, the McKinsey report concluded. Only 11 chief executives of Fortune 500 companies are women, down from a peak of 15 in 2010, according to a spokeswoman for Catalyst Inc., a nonprofit women's research group. There were two Fortune 500 female CEOs in 2000, up from one in 1995, Catalyst said in a 2000 report.
Similarly, the McKinsey study cited a 2010 Catalyst report that said 37% of lower-level and middle managers are female, while just 26% of vice presidents and other senior managers are women at Fortune 500 companies.
To crack the upper echelons of corporate America, McKinsey said companies must groom a deeper bench of female middle managers for advancement.
'By increasing the number of women who make it from middle management to the vice presidential level, corporations could vastly improve the odds for building diversity in top management,' the report added. Even a 25% increase in the ranks of middle-management women reaching the next level 'would significantly alter the shape of the pipeline,' it said.
McKinsey plans to release its report during a 'Women in the Economy' conference sponsored by The Wall Street Journal in Palm Beach, Fla.
Joanna Barsh, a McKinsey senior partner who co-wrote the report, said companies need to spend more time coaching women and offering leadership training and rotation through various management roles before their ambitions sour.
Ms. Barsh said the McKinsey study found that companies weren't 'systematically watching these women at the middle management level and putting in programs that would help them develop and get over the next [promotion] hurdle.'
The paucity of such assistance partly explains why women's ambitions decline over time, said Ms. Barsh. 'Barriers become insurmountable,' especially for working mothers, she added.
Based on the survey, McKinsey researchers found that female ambition declines sharply at middle age. About 64% of women ages 45 to 54 years old expressed a desire to advance professionally, compared with 78% of the men in the same age range. The comparable figures were 92% and 98%, respectively, for women and men aged 23 to 34.
A female former senior executive for a major insurer who wasn't involved in McKinsey's research agreed with the recommendations. Businesses committed to gender diversity at the top shouldn't just give 'lip service by having tokens,' this executive said. They should be 'actively grooming women, making sure they have mentors and actively promoting their careers.'
As part of its research, McKinsey also analyzed the makeup of executive committees at Fortune 200 companies and found women make up just 15% of the top management panels.
These 'women are doubly handicapped' because 62% occupy staff jobs 'that rarely lead to a CEO role,' the study said. In contrast, the report found that 65% of men on executive committees hold line jobs, which typically involve profit and loss responsibility for an operation.
To remedy this situation, the McKinsey report proposed that businesses work harder to change the mind-sets limiting women's opportunities, such as the popular notion that a woman can't juggle certain jobs and family duties.
As further encouragement, the report said that the performance of top managers should be judged partly on their ability to groom and promote female talent.
'A diversity program by itself, no matter how comprehensive, is no match for entrenched beliefs that prevail,' the report said.
Sunday, April 10, 2011
Wednesday, April 6, 2011
Economists React: PBOC Lifts Interest Rates
China's central bank raised benchmark interest rates Tuesday, a national holiday, lifting one-year yuan lending rate and the one-year yuan deposit rate by 0.25 percentage point each as the country continues to battle inflation. Analysts weigh in:
The timing of today's interest rate hike in China is something of a surprise given more dovish comments in recent days from senior officials, but the rate move is not entirely unexpected. The announcement may cause jitters about the impact tightening will have on Chinese growth. However these should not be overplayed. The latest increases of 25 basis points for one-year deposits and loans are in line with the gradual policy tightening that has been underway over the last few months and will not do much to slow the economy. The benchmark one-year lending rate now stands at 6.31%, still low relative to the pace of economic growth. The constraint on credit growth is the amount that banks can lend rather than the rates they charge. â ' Mark Williams, Capital Economics
This rate hike suggests that the March CPI that is to be released early next week may have surprised to the upside. Our current CPI forecast is 5.2% year-on-year for March. It also suggests that Chinese authorities are confident in the sustainability of underlying growth momentumâ ¦ This rate hike underscores once again the front-loaded monetary tightening, which, together with the rather substantial slowdown in money and credit growth so far this year, bodes well for peaking of the headline inflation rate by mid-year, in our view. â ' Qing Wang, Morgan Stanley
We believe the magnitude of the overall policy tightening package since the start of the year has been large enough to cool down aggregate demand growth sufficiently to lower underlying inflationary pressuresâ ¦ Given the nature of the most of the tightening measures tend to be administratively and quantitatively based, price-based tools which include interest rate hikes and currency appreciation should be welcomed as we believe they tend to be more efficient in resource allocation. Having said that, we believe the 25-basis point hike is more a signaling tool than anything else because of its small magnitudeâ ¦ Going forward, we expect the government to broadly maintain its tightening policy stance in the first half of 2011 given the expected elevated year-on-year CPI, though there might be some subtle adjustments as underlying inflationary pressures come off. â ' Helen Qiao and Yu Song, Goldman Sachs
Today's rate hike suggests three things to us. First, together with one reserve requirement ratio hike on 18 March, today's move signals China's tightening path is less affected by Japan'sâ ¦nuclear crisis. Second, headline inflation is likely to be above 5% in March. Third, China's monetary policy may lean towards front loaded tightening in the first half of the yearâ ¦ Thanks to the strong growth momentum, we expect China's growth to remain strong in the first quarter at 9.7%. However the growth pace is likely to slow gradually in the next few quarters as a result of tightening measures. Therefore, it may make more sense for China to tighten sooner rather than later to fight inflation when the growth rate is still high. â ' Tommy Xie, OCBC
The timing of today's interest rate hike in China is something of a surprise given more dovish comments in recent days from senior officials, but the rate move is not entirely unexpected. The announcement may cause jitters about the impact tightening will have on Chinese growth. However these should not be overplayed. The latest increases of 25 basis points for one-year deposits and loans are in line with the gradual policy tightening that has been underway over the last few months and will not do much to slow the economy. The benchmark one-year lending rate now stands at 6.31%, still low relative to the pace of economic growth. The constraint on credit growth is the amount that banks can lend rather than the rates they charge. â ' Mark Williams, Capital Economics
This rate hike suggests that the March CPI that is to be released early next week may have surprised to the upside. Our current CPI forecast is 5.2% year-on-year for March. It also suggests that Chinese authorities are confident in the sustainability of underlying growth momentumâ ¦ This rate hike underscores once again the front-loaded monetary tightening, which, together with the rather substantial slowdown in money and credit growth so far this year, bodes well for peaking of the headline inflation rate by mid-year, in our view. â ' Qing Wang, Morgan Stanley
We believe the magnitude of the overall policy tightening package since the start of the year has been large enough to cool down aggregate demand growth sufficiently to lower underlying inflationary pressuresâ ¦ Given the nature of the most of the tightening measures tend to be administratively and quantitatively based, price-based tools which include interest rate hikes and currency appreciation should be welcomed as we believe they tend to be more efficient in resource allocation. Having said that, we believe the 25-basis point hike is more a signaling tool than anything else because of its small magnitudeâ ¦ Going forward, we expect the government to broadly maintain its tightening policy stance in the first half of 2011 given the expected elevated year-on-year CPI, though there might be some subtle adjustments as underlying inflationary pressures come off. â ' Helen Qiao and Yu Song, Goldman Sachs
Today's rate hike suggests three things to us. First, together with one reserve requirement ratio hike on 18 March, today's move signals China's tightening path is less affected by Japan'sâ ¦nuclear crisis. Second, headline inflation is likely to be above 5% in March. Third, China's monetary policy may lean towards front loaded tightening in the first half of the yearâ ¦ Thanks to the strong growth momentum, we expect China's growth to remain strong in the first quarter at 9.7%. However the growth pace is likely to slow gradually in the next few quarters as a result of tightening measures. Therefore, it may make more sense for China to tighten sooner rather than later to fight inflation when the growth rate is still high. â ' Tommy Xie, OCBC
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