The Journal The Authority on Global Business in Japan

This month we begin a series of discussions that expand on the Women in Business white paper Untapped Potential, starting with efforts to ensure women get equal consideration for management positions.

Japan’s Act on Promotion of Women’s Participation and Advancement in the Workplace was enacted on September 4, 2015, and went into full effect on April 1, 2016. Businesses with more than 300 employees are required to publish numerical targets and other metrics to enhance transparency with respect to women in the workforce.

The White Paper on Gender Equality 2017, however, reports that only 48.9 percent of companies required to do so disclosed information to the Japanese Ministry of Health, Labour and Welfare (MHLW). There are no mandatory disclosure targets or penalties for nondisclosure.

Reported data—presumably from companies that are comfortable revealing their progress—shows that just 11 percent of managerial positions are held by women, the second lowest among Organisation for Economic Co-operation and Development member nations. So, we have moved two steps forward and one step back.

Tachimori: As a woman executive who has worked in Japan in the corporate world for many years, what positive progress have you seen?

Beyer: There is no doubt that there are many more women in the workforce today than when I was starting out. And women seem to be staying in the workforce in greater numbers, and returning sooner after starting families. Of course, women still struggle to balance career and family. We haven’t reached the point in Japanese society or the workplace where people naturally accept that fathers have as much responsibility as mothers when it comes to childcare and child-rearing. We’ve only taken small steps.

Tachimori: That is true. Only half the required companies are disclosing their data. What concrete steps are needed to enhance transparency and achieve our goal?

Beyer: Perhaps lawmakers assumed that companies that don’t comply will be incentivized when they realize that jobseekers prefer competitors who do. But, in my personal opinion, the only way that might work is if all companies are listed on the MHLW website with “non-compliant” written in big red letters next to those who don’t report. Even then, serious impact is doubtful. I think that there should be substantial fines for non-compliance, as well as a calling out of violators on the website.

I believe the MHLW is already offering some sort of badge to compliant companies. The ministry should also set goals for hiring and promoting women, and award bronze, silver, and gold levels as companies approach or meet those goals.

Additionally, the current reporting structure allows companies to “cook the books” in terms of how they classify management-level employees. That is, some companies have decided that even kacho (section head) level is a management position, making their metrics look like they have a greater percentage of women in management than they actually do.

One way to prevent such distortion is to require more granular reporting. It would be useful to have companies report women directors and statutory officers as well as women at the senior-most levels and in entry-level manager roles. In addition to setting goals, it might also be useful to have companies report on how many women are in the pipeline for promotion to management levels.

Tachimori: I agree, we definitely need to require more detailed reporting in this new law. What challenges do you see with regard to transparency in the decision-making process when promoting women?

Beyer: The biggest challenge is the incredible strength of unconscious bias. Because it’s unconscious and deeply ingrained, it seems there is no mechanism for people to question themselves or each other. It doesn’t help that decision-makers are predominately male. If companies had to proactively identify women in the pipeline for promotion, as I suggested, perhaps women would get a closer look when it comes time for promotion and decision-makers would challenge themselves to ensure that decisions are fair and unbiased.

Makiko Tachimori (Fukui) and Vicki Beyer are vice-chairs of the ACCJ Women in Business Committee.