News Norway’s sovereign wealth fund to reject all-male Japanese boards

A senior fund official said that Norway's sovereign wealth fund, the world's biggest, will be voting against the nomination of all-male boards in Japanese companies. Japan, where the business world has long been male-dominated, had been given a grace period.

In a bid to promote diversity and gender equality, the fund, currently worth more than 15 trillion kroner (US$1.36 trillion), already rejects nominations to boards for companies in Europe and North America that do not include at least two women. [...] "Of the developed markets, we hadn't started to vote against companies in Japan, because they were so far behind that we really would have hit a large number of companies," said Carine Smith Ihenacho, head of governance and compliance at the fund. In 2021, the fund gave Japanese companies "two years to improve," she added. Women in Japan have high levels of education, but few hold senior positions in the business world and politics. Business daily the Nikkei said that women hold only about 10 percent of board positions in Japanese companies.

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I honestly don't like this type of mandate. I understand why some groups make them, but I don't approve of arbitrary inclusion just for the sake of arbitrary inclusion or creating the appearance of equality. It does not create equality but instead creates inequality, in my opinion. I feel that the people who can best do the job should be the ones doing it, it should not be based on race, gender, or anything else. That is as close to equality as you can get.

Japan needs to do better with equality. The best person for the job should get it, the list of requirements should not be specifying race or gender or a minimum quota of one or both.

I generally don't post things like this as I know that it can quickly become troll fodder. Sorry if this starts a thread war, I hope it does not!

Petaris said:

I feel that the people who can best do the job should be the ones doing it, it should not be based on race, gender, or anything else.

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Clearly that's not happening which is why these policies are being enacted. These kinds of positions are typically given out based on relationships not on ability or who can best do the job. Anyway this is not even a mandate. The companies have no obligation to follow Norway fund's guidelines unless the fund is a major shareholder with enough votes to affect their board nominations.

If they really want true diversity they should have at least one nice gaijin on their board!

I can see valid points on both sides, greater representation is important and needed, but without qualitative standards or regulation, the situation will not be improved by the rule, and boards will do the bare minimum to meet the letter of the law only.

Interestingly when I prompt Bing with "lack of diversity on Japanese corporate boards" it logically thinks it means "Japanese men."
I wonder where it got that idea.

Norway, has it's sovereign wealth fund as a cushion so it can pursue socially democratic policies in it's private sector. In this instance, their private sector companies can pursue full equality where they have say equal numbers of men and woman at the top by means other than merit and if that company fails because of that, the Norwegian company won't be affected. Other countries can't afford that luxury.

When I use this example, I want to be clear that I'm not saying that woman are inferior in any way than men but what I do mean is that when you try to artificially create gender equality by methods other than merit then there is a danger that for instance doing so in a private sector company that could affect it's long term survival is not good.

Belkov said:

Norway, has it's sovereign wealth fund as a cushion so it can pursue socially democratic policies in it's private sector. In this instance, their private sector companies can pursue full equality where they have say equal numbers of men and woman at the top by means other than merit and if that company fails because of that, the Norwegian company won't be affected. Other countries can't afford that luxury.

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My response is that people at the top of any organization are rarely there based on merit alone. I would say that's an exception. If the process was merit-based we'd have a lot more diversity naturally.

mdchachi said:

My response is that people at the top of any organization are rarely there based on merit alone. I would say that's an exception. If the process was merit-based we'd have a lot more diversity naturally.

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I need to clarify. I was talking of merit rather than meritocracy. By that, I mean these people are in these positions because they have proven to conform to values and culture of the companies they belong.

Rightly or wrongly, that should at least allow these companies to hold a steady course for their strategy and not make not silly mistakes like that Bud lite did recently which is hitting short term profitably and brand loyalty. I know the example I have given is at the centre of this culture war thing which is controversial and polarising but I had used it because it was something that has been blown out of all proportion and is hurting sales. It shouldn't have happened as only middle aged guys drink the stuff and I don't very much that young, progression individuals would touch it as frankly there are better products on the market.

Going back to my original reply, if a Norwegian company has this policy of full gender equality in the private sector and a big corporation there made a strategic error through this and affected profitability or even the companies affected, that countries economy won't be affected due to their Sovereign wealth fund. However, a lot of countries don't have that luxury as it is fair to impose these values onto other countries?

I don't know much about Japanese business but from what I've heard, if these funds do not have preferential rates from others on the market, I'm sure Japanese businesses will sincerely apologise that they can't fulfil that criteria and go elsewhere to secure funding.