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Japan’s rocky road to gender equality

Home / Hermes EOS Blog / Japan’s rocky road to gender equality

Sachi Suzuki,
29 January 2015
GovernanceSocial

Laggard
Despite being the world’s third-largest economy and a country full of technological advances, Japan has one of the poorest track records in gender equality of the developed countries. In fact, in global gender equality tables it often ranks far below nations that are not as wealthy or developed. The participation of women in Japanese business and politics, particularly at senior levels, remains extremely limited. Where we see significant pressure to improve the perceivably low figure of 20% women on company boards in Europe, the substantially lower number in Japan of 3%, according to NGO Catalyst, is even more shocking.

Culture
There are many reasons for this situation. A traditional, male-dominated corporate culture and group-think among senior management is certainly to blame. But even those companies that appear to try hard to change the environment for women are struggling to find suitable female candidates for director or senior management positions due to a genuine lack of talent pool. The Equal Employment Opportunity Law was only introduced in Japan in 1986 and merely obliged companies to ‘endeavour’ to treat men and women equally in recruitment and promotion. In 1997, the law was revised, introducing a ban on gender discrimination in recruitment and promotion. Until then, Japanese companies typically foresaw a separate career path for young women – one of undertaking clerical tasks without opportunities for promotion. This was based on the assumption that women would leave their positions after getting married and starting a family. Even highly talented women with degrees from top universities were left with little choice but to take up clerical jobs, leaving very few peers who could pursue a career at the same level as their male colleagues. The Japanese tax and pension system has contributed to this situation, as it is designed to give preferential treatment to married couples where one partner earns very little or has no income at all. This creates an incentive for women to forego a professional career. Last but not least, Japan’s working culture of notoriously long hours and frequently imposed relocations makes it difficult for women to work at the same level as their male counterparts.

Change
But the good news is that changes are underway. Companies have begun recruiting men and women for the same positions and the gender ratio among new hires is gradually becoming more even. Many companies have told us about their efforts to promote women to senior levels, for which we have seen some evidence. The government meanwhile is discussing reforming the tax and pension systems. There will be obstacles along the way and a shift in culture will be slow but changes are moving in the right direction. We, at Hermes EOS, are hopeful that we will see and influence a notable increase in the number of female directors and executives in Japan in the not-so-distant future.

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Sachi Suzuki Sachi Suzuki is sector lead for industrials and responsible for engagement activities mainly in Japan and southeast Asia. Prior to joining Hermes EOS, she worked as a senior research analyst at EIRIS where she was responsible for the assessment of the ESG performance of Japanese companies, as well as research on bribery and corruption. Sachi graduated from Keio University in Japan with a degree in Economics and holds an MSc in Development Studies from the School of Oriental and African Studies, University of London. She holds the CFA Institute’s Investment Management Certificate.
Read all articles by Sachi Suzuki

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