Systematic Stewardship in Action: Gender Diversity in Japan

Gender Diversity

Gender diversity in Japanese companies has long lagged levels across global developed markets. The ratio of women among all directors is 17% for Nikkei 225 companies, while in the United Kingdom companies average 40% and, in the US, 33%.1 While the percentage of female directors in Japan remains well below comparable numbers in Europe and the US, organisations with more female directors were found to have outperformed their peers by 7% in 2023.2

 

Impax has engaged with Japanese companies regarding gender diversity for many years to address this gap, most recently in partnership with the Asian Corporate Governance Association (ACGA). In 2022, Impax signed an ACGA letter to the Japanese Financial Standards Authority (FSA) and the Tokyo Stock Exchange (TSE) to promote female representation in Japanese companies. The letter, later submitted by the FSA to the Japan Cabinet Office, prompted Japan’s then prime minister to announce in April 2023 that the boards of all companies listed on the TSE Prime market (approximately 1,800 of the largest companies in Japan) should have 30% female executive officers (“Yakuin”) by 2030.3

 

Following this major step forward from the Japanese government, Impax engaged with regulators and policy makers in Tokyo for a series of meetings, including a Gender Diversity Roundtable co-hosted with the ACGA. This event, moderated by the former Secretary General of ACGA Jamie Allen and Kaoru Kobu, Head of ESG, Japanese Equity Investment at Invesco Japan, gathered 70 Industry colleagues. The purpose of the roundtable was to discuss the importance of the 30% target and share ideas about building a gender-diverse leadership pipeline in Japan. The group discussed possible courses of action, like establishing clearer career pathways and improving work-life balance, as well as issues that could hinder progress, like the lack of open positions, and entrenched boards that reflect stagnant corporate culture. 

Building an equitable workplace

As a country with an ageing, but well-educated, population, Japan stands to benefit from including more women in its workforce.4 In recent years, more women have continued working after marriage and returned to work after having children, but participants noted that a more equal split of household duties could help speed workplace equity. Only 17% of Japanese men eligible for parental leave actually took it, compared with 80% of women. Japanese married women spend five times more time doing chores than their husbands, compared with three times more for women in Germany.5

 

Another potential roadblock on the route to 30% female leadership by 2030 is the lack of female candidates for open positions. More women need to be both trained from junior levels and encouraged to remain in the workforce in order to achieve senior levels in their careers. Companies could achieve this by developing clearer career tracks, or ‘leadership pathways’, enabling more women to reach senior positions. As career pathways are built and more women become qualified to fill Yakuin positions, vacancies must also rise in step to achieve the diversity split.

 

Hiring and retaining more women at all levels whilst offering visible progression pathways will be critical to meeting the government’s stated aim. With supportive government policy, we believe corporations can move beyond longstanding male-dominated workplace culture, bringing more women into the ranks of the Yakuin and helping lead Japan’s corporates into the future. 

  1. Spencer Stuart, March 2024: 2023 Japan Spencer Stuart Board Index ↩︎
  2. HRM Asia, 2023: Greater female leadership representation benefits firms in Japan. ↩︎
  3. The Japanese term Yakuin refers to an officer or executive in Japan. This term is used to describe individuals who hold key management positions within an organization, such as directors, board members, or corporate officers. ↩︎
  4. Kitao, S. and Mikoshiba, M., 2020: Females, the elderly, and also males: Demographic aging and macroeconomy in Japan, Journal of the Japanese and International Economies ↩︎
  5. The Economist, January 2024: Married women in Japan are re-entering the labour market ↩︎

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