Diversity in Japanese Companies’ Boardroom: Sign of Shifts in the Japanese Model or Corporate Governance Reform as a Fashion?

Abstract

This paper discusses the gender diversity of the board in Japanese public companies. Its implications are analysed against the background of the recent reform of corporate governance in Japan. During the post-war period, the Japanese corporation has been the “insiders’ community”: the employees committed to a single company for almost throughout their career, and the board members were chosen from senior employees. Recently, however, the focus has shifted to changing the board from executive organ to monitoring mechanism, facilitated by the reform to increase independent (outside) directors. The female participation in the board could be another driver for the orientation towards the monitoring board, radically changing the traditional “insiders’ community.” Alternatively, in a company that still appoints most board members from among the senior employees, the increased female directors could serve as the role model for female employees, facilitating the gender diversity in the workplace, but reforming the board structure only gradually.