Gender diversity on corporate boards refers to the inclusion of people of different genders in the leadership teams of companies. It aims to ensure that decision-making bodies reflect a balanced representation of men, women, and individuals of diverse gender identities.

Every individual deserves to have their gender identity respected and acknowledged. Gender diversity is about recognizing and upholding the fundamental human rights and dignity of all people, regardless of their gender identity.

This is not only a matter of fairness but also associated with improved business performance and a broader range of perspectives. Despite progress, there's still work to be done to break down barriers and promote equal opportunities for all genders in corporate leadership.

Gender diversity on corporate boards is seeing an unprecedented surge of interest, which is a turning point for Japan's business world. The persistent pressure from foreign investors, together with proactive initiatives from startups like OnBoard K.K., has compelled Japanese corporations to prioritise the appointment of more women to powerful board seats.

This revolutionary trend, led by former mayor and CEO of OnBoard K.K. Naomi Koshi, is altering Japan's economic scene and tackling long-standing gender imbalances. A seismic shift in boardroom dynamics is anticipated to result from the convergence of global influence, local efforts, and visionary leaders, paving the way for a more inclusive and liberating future for women in Japanese enterprises.

Foreign Investors' Influence Spurs Gender Diversity Push

Pressure from international investors is forcing Japanese corporations to actively seek greater female diversity on their boards, marking a dramatic shift in the corporate landscape of Japan. The initiatives of OnBoard K.K., a firm run by Naomi Koshi, a former mayor turned CEO, and which focuses on educating and connecting prospective female board members with Japanese corporations, are driving this trend. In 2023, particularly among listed firms, demand for OnBoard K.K.'s services has increased significantly, according to Naomi, CEO of the company. Promises given to foreign investors and peer pressure from the business are credited as the causes of this movement.

In reaction to institutional investors like Norway's $1.4 trillion pension fund, BlackRock, and Goldman Sachs Asset Management establishing rules to vote against Japanese firms with insufficient female board presence, there has been a drive for gender diversity. The stakes were demonstrated by the instance of Fujio Mitarai, CEO of Canon Inc., whose shareholder votes decreased from 75.3% to 50.6% as a result of proxy counsel Institutional Shareholder Services' recommendations against his reappointment since the board lacked female directors.

Government and Exchange Initiatives Support Gender Parity

By announcing intentions to encourage firms listed on the TSE Prime Market Index to increase the proportion of female CEOs to at least 30% by 2030, followed by amended guidelines from the Tokyo Stock Exchange, the Japanese government has also joined the movement. Despite these measures, just 3.7% of Prime Market businesses have succeeded in achieving this objective.

Naomi emphasizes the importance of investors as one of the many factors behind this transformation. The ability of shareholders to influence board composition makes them the most potent change agents. Notably, domestic institutional investors are embracing rules that support board diversity, such as Nomura Asset Management and Daiwa Asset Management.

In order to counteract its ageing and declining population, Japan, the third-largest economy in the world, has realized the need of expanding female job participation. Diversity in powerful positions has, however, traditionally proven difficult to achieve. The nation trailed far behind its G7 counterparts, placing 116th out of 146 nations in the World Economic Forum's Global Gender Gap Report.

A Journey Toward Change: Naomi Koshi's Story

Naomi was elected as Japan's youngest female mayor. She created nurseries for more than 3,000 kids throughout her reign because she understood the difficulties women still confront in the corporate environment. Her personal experiences motivated her to confront these problems head-on, which led to the establishment of OnBoard K.K. in 2021.

The obstacles to gender diversity still exist, including the need to change young women's attitudes and deal with the pipeline problems in industries like manufacturing. Koshi is still upbeat about how variety has the power to improve society. She imagines a day where women are empowered to follow their passions and make significant choices.

The development of Japan's business environment is shown by recent statistics published by Bloomberg. In the second quarter, the average number of female directors on boards of businesses included in the Nikkei 225 Index rose from 1.6 to 1.7, out of an average board size of 10.5 members. Despite this development, just 16.5% of directors are women, which is much lower than other comparable countries throughout the world.

Path Towards Equitable Corporate Landscape

In conclusion, Japanese corporations are prioritising female diversity on their boards due to pressure from international investors, government efforts, and legal reforms. In this shift, leaders like Naomi Koshi and firms like OnBoard K.K. are making a significant contribution. While obstacles still exist, the corporate landscape in Japan is steadily changing as more people are becoming aware of the advantages of diversity. Over time, it is anticipated that this momentum will result in a more equal and inclusive business climate.