Aren’t More Foreigners Needed on Japanese Boards?

The global trend towards having more women on boards is a healthy one. Women bring a different perspective and common sense to boards and management in general. But in Japan's case, shouldn't diversity also be widened a lot more to include non-Japanese, regardless of gender?

A article in the Harvard Business Review pointed out thatmany Japanese multinationals have failed to go the last mile in becoming true multinationals, because they have failed to promote foreigners from within and therefore lack local (i.e. , worldwide) market perspectiveon their boards now – as well as the abilty to be more nimble, which comes with such perspective. Many observers have wondered whether Toyota could have managed its reputational issues better in the U.S. market, had an American been on the board.

It seems that U.S. companies already take this tack, but need to do it even more. Dan Konigsburg has written: “Because so many U.S. governance practices originate overseas, I believe directors can stay a step ahead by taking a broader, more global perspective. The UK, for example, has several years of experience with ‘say on pay’ resolutions, and has offered shareholders proxy access for years. For boards looking to increase their effectiveness, international practices can provide a fresh perspective and, sometimes, a new approach to long-standing problems. I find that international directors not only can shed light on how business gets done overseas, but also can bring an outsider’s perspective to board discussions. From a board composition perspective, global experience is an increasingly relevant qualification when seeking new directors; if you are a multinational business yet your board contains no non-U.S. directors, the new SEC disclosure rules relating to director background may encourage you to create a board that reflects your global customers.”

The Board Director Training Institute (BDTI) is a "public interest" nonprofit in Japan dedicated to training about directorship, corporate governance, and related management techniques. It is certified by the Japanese government to conduct these activities as a regulated nonprofit. Read a summary about BDTI here, and see a menu of its services for both corporations and investors here.

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