Japan’s Boardrooms: Embracing Diversity and Global Talent

The number of women serving on boards in Japan has seen a significant increase in recent years. However, there remains a substantial opportunity to further enhance board strength by considering global talent. Introduced in 2015, the Corporate Governance Code has played a pivotal role in this shift, aiming to improve corporate governance across the nation. Investor pressure has also driven a rise in boardroom independence, leading to an increased appointment of external directors over the past decade.

Tracy Gopal, CEO of Third Arrow Strategies and founder of the Japan Board Diversity Network, emphasizes the importance of embracing board diversity. Her organization is dedicated to promoting diversity in boardrooms, highlighting the need for a broader perspective by including global talent. Despite progress, the number of women on boards continues to be a concern, necessitating further efforts to achieve gender balance.

Third Arrow Strategies provides strategic insights into enhancing boardroom dynamics. The organization advocates for considering both non-Japanese individuals and Japanese residing overseas for board positions. This approach could significantly diversify perspectives and contribute to more robust decision-making processes within companies. However, geographic and language barriers remain obstacles in fully realizing this potential.

The introduction of the Corporate Governance Code in 2015 marked a turning point in Japan's corporate landscape. It has encouraged companies to adopt practices that enhance transparency and accountability. As a result, investor pressure has intensified, leading to an increase in boardroom independence. This shift is evidenced by the notable rise in external directors appointed to boards over the past decade.

Despite these positive changes, the representation of women on boards still requires attention. While numbers have improved, they fall short of achieving true gender parity. By expanding their search for talent beyond national borders, companies can tap into a wealth of expertise and experience that transcends geographical limitations.