Corporate Japan’s lack of gender diversity is a widely known issue. While investors and the government have been pushing for greater female representation on company boards, women-only reportedly represent just six percent of board members at listed Japanese companies today, even though it represents a modicum of progress compares to three percent back in 2016.
Since Shinzo Abe, Japan’s former prime minister, launched his government's “womenomics” drive some seven years ago to encourage female leadership, companies have sought to encourage greater representation. But progress has been slow, for a variety of factors.
Naomi Koshi, a former mayor of Otsu City who is currently a partner at Japanese law firm Miura & Partners, has started campaigning to improve gender diversity in the country’s boardrooms this year. In her experience, women can play a significant role as company directors. “I believe we can bring a different point of view,” she says.
But Koshi tells ALB that structural barriers must still be tackled. She mentions an example from when she was mayor of Otsu, where a common issue for working mothers was the inability to find childcare. “In 2005-2009, 60 percent of women quit their jobs after having a child because they couldn’t find nurseries,” she says. “So, I focused on that issue, and over eight years I built more than 50 nurseries for approximately 3000 children. It had an almost instant impact… the number of working mothers with children under the age of five has increased by 70 percent”.
She feels this type of problem-solving can be applied to corporate culture in Japan. “They can change their culture, and not only their corporate culture, but also their corporate values and outcomes,” says Koshi.
But while certain companies are pushing to ensure they meet investor- and government-driven targets, Koshi believes it is important to ensure companies do understand the important reasons that underpin encouraging female leadership.
“My view is that Japanese companies are trying to have more female directors, but some companies do not fully understand why they have to do that,” says Koshi. “Certain foreign investors strongly ask companies to have female directors, and this call is also being echoed by Japanese investors.
The Japanese government is also active in changing policies and laws. Finally, the Tokyo Stock Exchange is helping by introducing a new corporate governance code under which gender diversity in corporate boards is required.”
But while Japanese companies are making efforts to be compliant, says Koshi, there is still some way to go before there is a true shift in mindset. There are also challenges when it comes to ensuring that women in power are sufficiently supported.
“Based on my experience as mayor, I was almost always minority as a woman, such as only woman surrounded by older men. That kind of situation sometimes made it difficult that my voice be heard. That would also happen in the boardroom,” says Koshi, explaining that these issues can appear when there is a lack of understanding around existing barriers. “We need more female directors in the boardroom. Also, female directors should share good practice to know how other female directors act, how others contribute to the company”.
To prepare women for board-level leadership, there needs to be sufficient gender representation at a management level. Recently, a Reuters poll conducted between September and October found that 17 percent of Japanese firms had no female managers, while 71 percent of firms said women accounted for less than 10 percent of management.
Changing Japanese corporate culture is still highly challenging, says Koshi, but companies and individuals can lead by example.
“Since getting elected as an outside corporate director in March, I have been asking company executives and other board members questions related to the status of female managers and their strategy in regards to promoting female managers. I believe those female board members are responsible to serve as a reminder to corporate Japan that diversity is an important issue of corporate governance.”
When speaking to employees, Koshi said she gained feedback about the impact of her presence: “Some female employees said its good I’m on the board, because earlier it was all men. With the presence of a woman, they feel encouraged.”
While more female leaders are clearly needed, when it comes to making a structural shift, it’s
also important that male leaders are supportive and inclusive, says Koshi.
“Male directors must understand the importance of different viewpoint of female directors and more diversified and inclusive board can make the company more innovative,” Koshi says.
Westlaw Japan and Miura & Partners will be hosting a virtual seminar led by Koshi on Dec. 3 called ‘Women on Board’ for Japanese corporates and the legal industry. More details can be found here: https://www.westlawjapan.com/event/premium/201203.html
To contact the editorial team, please email ALBEditor@thomsonreuters.com.
