Japanese government to step up on gender diversity on the back of disappointing figures

Ministry of Economy, Trade and Industry will increase efforts on the topic following a report

Japan’s government will bolster measures to increase diversity at listed companies, after a review found stagnation of female leaders at just 3.7% last year, despite moves from the country’s biggest pension fund and its central bank to back female empowerment products.
Last year, Japan’s Ministry of Economy, Trade and Industry (METI) released recommendations for improving diversity at companies, called The Diversity 2.0 Action Guidelines.
However, since its release, the number of female managers at listed companies has stagnated at 3.7%, according to a study group who reviewed diversity trends in Japan this year. The Japanese Government’s target for female leaders is 10% by 2020.
Other trends identified by the ‘Study Group for Ideal Approaches to Diversity Management as a Competitive Strategy’, include large Japanese asset owners investing in diversity indices. Bank of Japan, the country’s central bank, and pension giant GPIF, for example, have both invested in the MSCI Japan Empowering Women Select Index. Millennials also increasingly want diversity at companies, the report points out, and Japan’s Corporate Governance Code has been revised to include diversity measures.
The Study Group, chaired by Tetsuo Kitagawa, a Professor at the Graduate School of International Management, Aoyama Gakuin University, makes a number of recommendations to further boost diversity – including selecting women as board members and proactively reporting diversity information.It also encourages the Japanese Government to create a database of ‘diverse’ board member candidates; set a certification system for diversity training; and revise its diversity guidance to include roadmaps that companies can follow to meet diversity goals.
In response, METI will revise the existing Diversity 2.0 Action Guidelines, reflecting the recommendations in its criteria for selecting leading companies on diversity – an initiative dubbed ‘the Nadeshiko Brands programme”.
In 2017, 47 companies achieved the ‘Nadeshiko Brand’, used to identify Tokyo Stock Exchange-listed enterprises considered outstanding in encouraging female empowerment in the workplace. They include Daiwa Securities Group, Mitsui Financial Group, Japan Airlines and Nissan Motor Company.
Elsewhere, Japan Exchange Group, the owner of the Tokyo and Osaka stock exchanges, is to establish a Sustainability Committee next week. The committee, effective from the beginning of July and reporting directly to JPX CEO Akira Kiyota, will promote ESG investment to further the UN Sustainable Development Goals and “contribute to the establishment of a sustainable society”. JPX also joined the Sustainable Stock Exchanges initiative in December 2017, and in April released a new management plan putting particular emphasis on ESG investing.

Additional reporting by Ella Milburn