“diversity is imperative”

Same target, new deadline

Kathy Matsui on Japan’s womenomics goals


September 2020 Executive notes / Text by Dan Sloan

A record number of women have joined Japan’s workforce, but the government has admitted that its deadline of 2020 to see 30% of women holding leadership roles in the public and private sectors has been missed — and missed badly.

Womenomics — a word coined over two decades ago by Goldman Sachs’ Chief Japan Strategist Kathy Matsui — called for greater labour integration of women to maximise national economic performance.

Since Prime Minister Shinzo Abe took office in 2012, relying on women as an engine of economic growth has become a pillar of his Abenomics platform. Japan’s share of women in the workforce, which now stands at 71%, exceeds many other OECD nations.

However, the country’s glass ceiling has not moved much during Abe’s tenure. Only two of 11 current cabinet ministers are women, while the Japan Business Federation (Keidanren) has 19 chair and vice chair positions that are all held by men.

Minister of State for Gender Equality Seiko Hashimoto, who also holds the roles of Minister in Charge of the Tokyo Olympics and Minister in Charge of Women’s Empowerment, told Abe in July that reaching the goal this year was impossible.

The government now believes its 30% top leadership target for women, initially set in 2003, will now be reached sometime in the 2020s. According to The Mainichi newspaper, women occupy 14.8% of leadership roles in Japan’s business sector and less than 10% in national government.

“I am not completely shocked,” Kathy Matsui told Eurobiz Japan. “It’s disappointing, as the date was postponed with no public dissemination or analysis of what the obstacles are. There is some onus on the government to explain.”

But Matsui says Japanese companies have a responsibility as well.

“There’s only so much that the government can do — it can’t meddle in the internal workings of management,” she says. “That’s why diversity is imperative and [companies should be] setting their own targets.”
Matsui’s new book in Japanese is titled How to Nurture Female Employees and is a primer on what firms and those in leadership positions must consider to retain and promote women in their organisations.

“Companies need to build motivation and loyalty, and explain what the upside is for a woman’s career,” she notes. “If she feels that she’s not that essential, then those pull factors are not that strong. Why doesn’t leadership offer something stronger or make her feel that they care? They need to consider how much time has been spent on her career development.”

The potential for improvement is considerable, both for potential female leaders as well as employees. Despite government initiatives over two decades, gender wage gaps, tax disincentives against fuller participation in the labour force, and weak childcare options have continued. Even with more women working than ever before and a 25% increase in daycare usage, pronounced gender inequities have left Japan with a ranking of 121 of 153 nations in the World Economic Forum’s Global Gender Gap Report 2020.

According to Matsui, womenomics has brought 3.3 million more women into the workforce than there were in 2013. But this year Covid-19 has sharply reversed economic expansion, sending the nation into its greatest postwar recession, which will surely have a major impact on labour policies.

As schools closed or went online, childcare during the pandemic has fallen disproportionately on working women. However, Matsui says greater corporate adoption of telework may finally highlight the value of productivity over time spent at the office, which will ultimately help all parties in a country renowned for long hours and often low output.

“Until now, if you took flextime, your work ethic was questioned, but when everyone is doing it, then it’s easier,” she says. “If more Japanese companies can move to performance-based measurements, then this will advance that discussion. It’s not just for women — it’s for everyone, and a potential silver lining of the pandemic.”

A Fifth Basic Policy for Gender Equality, covering the next five years, is expected from the government by yearend, but it may be more aspirational than motivational. Laws created in 2016 and 2018 to promote female leadership in business and government have lacked legal ramifications to thwart non-compliance.

“Many say the Bank of Japan’s 2% inflation target is unrealistic, but it does hold the bank accountable. [The 30% goal] is necessary as a benchmark, as it is better to have a target than none at all,” Matsui says, noting the difference between having 30% female senior management and 30% as executives.
Will a 30% leadership target now find traction in Japan or will “30 by ’30” be the next mantra?

The 30% Club, an organisation established in the UK in 2010 to promote female executive advancement, has a chapter in Japan, which is focused on seeing this goal met at TOPIX 100 firms.

According to the group, female board members at Japanese firms account for just over 10% of directors, compared to more than 30% now in the UK, which saw a threefold rise over the past decade, after significant external pressure from investors and others who said enough is enough.

Goldman Sachs’ Matsui says hiring is not the problem. The issue is whether internal corporate priorities and policies are sufficiently exacting.
“CEOs have told me that they can attract women but [struggle with] how to retain and promote them,” she says. “The 30% Club needs 30% executives. That’s a much longer haul.”•

“Companies need to build motivation and loyalty”