Large Japanese Firms Urged to Raise Female Exec Ratio to 30％

The Yomiuri Shimbun

1:00 JST, June 6, 2023

The government has set a goal for large Japanese companies to have at least 30% of their executives be women by 2030, according to a draft compiled by the Gender Equality Council.

The goal applies to companies listed on the Tokyo Stock Exchange’s Prime market. The government is aiming to create momentum toward women being promoted more broadly.

The draft is for a key policy aimed at encouraging women’s participation in the labor force and improving gender equality. It will be reflected in the Basic Policy on Economic and Fiscal Management and Reform, to be adopted by the Cabinet by the end of the month.

The draft states that private companies in Japan are “lagging far behind internationally” in the promotion of women to executive positions.

Now that investors in Japan and abroad are increasingly looking at gender ratios for company executives, “It is urgent for these firms to accelerate the promotion of women to executive posts for the growth of the Japanese economy,” the draft notes.

As a specific measure, the council is requesting that companies listed on the TSE’s Prime market appoint at least one female board member by 2025. It has also called for action plans to ensure that at least 30% of executives at each company are women by 2030.

In order to ensure the plans’ effectiveness, the council will arrange with the TSE to incorporate these goals in the TSE regulations by the end of this year.

As for gender pay disparities, it became mandatory in 2022 for companies with 301 or more employees on a regular basis to disclose relevant information. The draft includes a plan to explore expanding this to companies with 101 to 300 employees.

To ease the burden of child-rearing on women, the council also stressed the need to have more men take childcare leave and to entrench the concept of dual-income couples sharing in child-rearing labor.

The draft also stipulates the establishment of a benefits system to ensure that take-home pay will not be reduced when parents with children under 2, regardless of gender, work shorter hours.

As one of the TSE’s three segments, the Prime market is for large companies that operate internationally, while the Standard market is for businesses that mainly operate domestically and the Growth market is for emerging companies. Listing criteria for the Prime market are the strictest among the three segments, requiring companies to have stocks with a tradable share market capitalization of at least ¥10 billion. As of Friday, there were 1,835 companies listed on the Prime market.