Japan’s Prime Minister Shinzo Abe set a goal of increasing the percentage of women in executive positions in the country’s companies to more than 30 percent by 2020. He also called for each Japanese company to have at least one female executive.
Currently, women hold just 1.6 percent of executive roles at Japanese public companies, and only 15 percent of its companies meet the requirement of having at least one female executive.
Japan is the latest developed country to set either a goal or even a specific requirement for increasing gender diversity in the corporate world. Germany will soon require companies listed on its stock exchange to have corporate boards that are 30 percent female by 2016, and Belgium, France, Italy, the Netherlands, Norway, and Spain all have gender quotas. The United Kingdom doesn’t have a strict quota, but like Japan, set a target in 2011 of 25 percent female boards by 2015. The European Union as a whole may soon have a 40 percent quota.
In the United States, on the other hand, there aren’t any goals or requirements. The only rules regarding gender diversity on boards are requirements from the Securities and Exchange Commission (SEC) that companies disclose information about how they take diversity into account when picking members of their boards. Even so, most companies don’t comply with the SEC’s rules. While American companies have a much better track record on gender diversity than Japan’s, progress has flatlined. Women’s percentage of board seats has hovered below 17 percent for the past eight years. By contrast, since the UK enacted its target, the percentage of women on boards among its biggest companies reached a record high. In Norway, the first country to enact a quota, women hold 35 percent of board positions.
Abe has pursued aggressive economic reforms in an effort to boost Japan’s economy, and one of the pillars has been increasing women’s representation and empowerment in the workforce. “Women are Japan’s most underused resource,” he has said of his plans. As part of the goal to increase the number of women in leadership, he’ll offer companies tax incentives. He has also promised to create 250,000 day care openings over the next few years and extend family leave to increase the number of women who hold jobs. Only about a third of Japanese mothers are in the workforce and about 70 percent of women quit working after their first child. Men’s employment rate is 20 percentage points higher than women’s. If women’s rate were raised to the same level as men’s, the country’s GDP could increase by as much as 15 percent.
There’s a huge body of evidence that increasing gender diversity among executive leadership could also be a big boon to the country’s businesses. More women on boards has been found to increase stock price and other performance metrics and to protect shareholder value. And it sparks a virtuous cycle: gender diversity has been found to fuel even more increases in diversity.