This year’s Global Board Diversity Tracker highlights both the progress and setbacks toward diversity in boardrooms across the world. Japan has made remarkable progress on gender diversity, with a significant increase in the number of boards with at least one woman, but there remains room for improvement.
In this deep dive, we analyze 127 leading companies in the country with a market cap of €8 billion and above, focusing on:
While this year’s Global Board Diversity Tracker highlights a progressive global trend in bridging the gender gap inside the boardroom, Japan in particular has stood out.
Women hold 13.6 percent of the board seats across the 127 companies we studied in the country—a solid increase from 2020, when that figure was 8.8 percent. This 4.8 percent change puts Japan ahead of the global average increase of 3.5 percent.
But Japan has made an even more impressive advancement this year with a 21.4 percent increase from 2020 in boards with at least one woman. Now, 92.1 percent of the country’s boards have at least one female director; in 2020, this number was 70.7 percent. This is the largest change in this market since we began tracking board diversity 18 years ago.
By comparison, the global average increase in boards with at least one female director was 4.7 percent, which highlights the massive progress Japan has made in only two years. Additionally, if we look at boards that have at least two female directors in Japan, the number has more than doubled from 18.3 percent in 2020 to 40.2 percent today.
If we compare Japan against other Asian countries analyzed in the Tracker (China, Hong Kong, India, Indonesia, Malaysia, Singapore, South Korea, and Taiwan), the nation ranks third in the number of boards that have at least one female director, behind only Malaysia and India, which have a perfect score of 100 percent.
What explains such improvement? A possible justification could be the Corporate Governance Code that the Tokyo Stock Exchange enacted in 2015, which has a strong component of ensuring transparent, fair, timely, and decisive decision-making that meets the needs and perspectives of shareholders, customers, employees, and communities.
When it comes to female directors in board leadership positions, Japan fares better than its Asian peers: women hold 13.3 percent of committee chair positions in Japan—up from 11.6 percent in 2020 (the Asian country average is 12.9 percent). Additionally, 18.2 percent of female directors hold committee positions—up from 16 percent in 2020.
If we zoom in on the non-executive chair role across Japanese boards, women account for 6.9 percent of chairs in 2022, up from 4.5 percent in 2020. (Here, the nation is also above the Asian country average of 5.1 percent, but still below the global average of 8.4 percent.) However, the number of female executive chairs fell from one to zero in 2022.
While there were major strides in gender representation across Japanese boards, the same cannot be said about the pipeline of female executives. Unfortunately, the share of female leaders at the top of their organizations was already scant in our last Global Board Diversity Tracker, and we saw little to no progress in 2022. There were zero female CEOs across the 127 Japanese companies we studied this year, down from one female CEO out of 162 companies in 2020. On the other hand, the number of female CFOs in Japan grew to one, compared to zero in 2020 out of a sample of 93 CFOs.
These statistics are understandable given the broader cultural context. A few decades ago, an executive career pathway for female leaders was rarely available in Japan, as Ms. Iwata’s career illustrates. “I graduated from university in 1971, and at that time, it was not common for women to be active in the private sector,” she explained. “Even if you were lucky enough to get a job in the private sector, the assumption was that you would get married and retire.”
Ms. Iwata added: “There is a long history of companies that have been overwhelmingly dominated by men. As a result, the common sense in the company is male-oriented. Many women were not able to adjust to this standard, and therefore were not able to be active in the company.”
However, we are starting to see change, with some progressive companies in Japan setting ambitious targets. Recruit Holdings, for example, has begun to set ambitious goals to achieve gender parity among senior executives, managerial positions, and all employee levels throughout the group by FY2030.
Looking at diversity more broadly, there are two interesting findings. On age, Japanese female board directors are slightly younger than their male counterparts: Women are 60.8 on average, while men are 64.8. And when looking at board composition from an international angle, we found that boards with at least one international director in Japan account for 40.9 percent of the 127 companies we surveyed (an 8 percent increase from 2020). Out of these, the share of female directors is 10.2 percent.
When it comes to international board directors, we observe steady progress among Japanese companies: 40.9 percent of the companies surveyed have at least one non-Japanese director, a significant increase from 32.9 percent in 2020. In addition, the percentage of non-Japanese directors on the boards of the companies analyzed grew to 8 percent, up from 6.4 percent in 2020.
As with gender diversity, the reference to "internationality" as a prerequisite for ensuring the effectiveness of boards of directors in the 2015 Corporate Governance Code could be a major factor driving these changes. Companies are growingly appointing non-national directors to incorporate foreign perspectives in the face of fierce global competition. In some cases, foreign directors recommended by investors are appointed as part of shareholder activism.
On the other hand, Japan is still less diverse on the measure of internationality than other countries. For instance, the share of companies with at least one non-national board director is 40 percent in Japan, 61.3 percent in Asia, and 73.1 percent globally. The share of non-national board directors in Japan is 8 percent, way below the 25.1 percent mark in Asia and the 25 percent mark globally.
The language barrier is a major obstacle, but the fact that Japanese companies hold more board meetings than other countries may also justify why Japan is behind on this metric. In this regard, the spread of teleconferencing tools will be a factor that could encourage the appointment of foreign directors.
Focusing on senior executive positions, the appointment of foreigners as CEOs and CFOs also remains very rare in Japan, where only 4 out of 129 CEOs and 3 out of 75 CFOs in the analyzed companies were non-Japanese. Companies with non-Japanese CEOs include those with global operations and those where foreign capital is influential. Although there are various obstacles to overcome in Japan, such as language and cultural differences and geographical restrictions, more diversity in leadership can certainly help Japanese companies improve their global competitiveness, and further internationalization of boards of directors is expected.
For Ms. Iwata, the future holds hope not only for gender diversity, but for leaders of all backgrounds. “I think that if such an era comes where the ratio of men to women in management becomes 50-50, I believe that men will be able to live more satisfying lives and work more productively than they do now,” she said. “Women, foreign nationals, and people with illnesses or disabilities who are not able-bodied people will be able to work. Not just women, but all kinds of people will be able to make the most of their talents and be active in their respective fields. It is not just women who are ‘50-50’. I can't wait to see it with my own eyes.”
Kimie Iwata, outside director and chair of Ajinomoto Co., Inc., discusses how diversity can help shape better outcomes for a board, and why achieving gender parity in boardrooms—and executive leadership—across Japanese organizations would be a powerful move for business and society.Download in-depth interview (in Japanese)
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