Japan’s Abe: Too few women in boardrooms

April 19, 2013

The request was polite and the scale was hardly European in ambition, but Japanese Prime Minister Shinzo Abe moved Friday to compel corporate Japan to promote more women to executive roles, asking business leaders to set a target of at least one female executive per company.

Abe’s proposal, which highlighted just how few women reach senior positions in Japanese business, was framed as part of a broader set of growth-enhancing reforms that he argued would complement efforts to stimulate Japan’s economy through increased public-works spending and a looser monetary policy.

“Women are Japan’s most underused resource,” he said.

Women occupy just 1.6 percent of executive roles at listed Japanese groups, according to a review of corporate reports by Toyo Keizai, a business publisher, and only 15 percent of companies have any female executives at all.

In Europe, by comparison, women fill 14 percent of companies’ most senior, board-level positions — a number considered low enough that it has been the focus of fierce policy debates over quotas and other means of increasing it.

By expanding what are too often tightly circumscribed career opportunities for women, from the executive suite on down, Abe said he hoped to draw more women into employment and reverse a decline in the country’s working population that has constrained output and stretched public finances.

More details are expected in June, when the government is to unveil a “national growth strategy” of deregulation measures and other structural changes designed to make the economy more dynamic.

Many experts say that without decisive reforms, the monetary and fiscal policies that Abe has introduced since coming to power in December — the “Abenomics” cocktail that has knocked down the yen and ignited the stock market — may have little long-term impact.

Kathy Matsui, chief Japan strategist at Goldman Sachs, welcomed Abe’s focus on women but said raising the country’s relatively low rate of female employment would require broader shifts in policy, corporate culture and social attitudes.

“The fact that the prime minister is talking this openly about women as part of the growth agenda is a big step,” she said. “But it’s one thing to talk the talk, another to walk the walk.”

In a 2010 paper, Matsui calculated that Japan could increase its labor force by 8.2 million and expand its gross domestic product by as much as 15 percent by raising the rate of female employment, then about 60 percent, to match that of men, which is more than 20 points higher.

Only about a third of Japanese mothers with young children work, compared with between 50 and 60 percent in the United States, Britain and Germany and three-quarters in Sweden. Abe promised to create 250,000 day-care openings in the next several years to relieve a chronic shortage that experts believe is partly to blame for the discrepancy.

Abe’s appeal to companies to promote more women relies on moral suasion and is unlikely to involve the kind of quotas that have been debated in Europe. Angela Merkel, the German chancellor, this week succumbed to pressure from female lawmakers in her own party to back a statutory quota for women’s participation on companies’ supervisory boards.

Board-level appointments of women are still headline-making events in Japan. In the past month, Panasonic and Japan Airlines have gained media attention by appointing women to their boards for the first time.

On at least one level, however, Abe’s initiative appears to signal a shift in thinking for his conservative Liberal Democratic Party. For years, many in the party have viewed women’s career ambitions as socially corrosive and a cause of Japan’s low birthrate — a health minister during Abe’s previous stint as prime minister, in 2006-2007, referred to women as “baby-making machines.”

In practice, experts say, the especially difficult task of balancing work and motherhood in Japan has probably exacerbated the country’s demographic problems, by prompting many women to delay marriage and the childbirth that they fear will stunt or end their careers. That idea may finally have gained currency in the LDP.

“There is a mountain of things to be done, but you have to start somewhere,” Matsui said. “This is the first time an administration has talked this much about the problem.”

— Financial Times

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