Solving Gender Gap in Higher Education Is Key, as Political Leadership Can’t Be Count On

The World Economic Forum (WEF) released its Gender Gap Report on June 21. I would like to discuss Japan’s ranking in the Gender Gap Index.

Japan’s ranking in the Gender Gap Index is as follows.
Among the G7 countries, Germany was the top-ranked country in 6th place, up four places from 10th the previous year. It was followed by the United Kingdom (15th), Canada (30th), France (40th), the United States (43rd), and Italy (79th). Japan was the only country that did not even make the top 100, falling nine places from 116th the previous year to its lowest ranking ever. The percentage of women in parliamentary and ministerial positions is low, and the country is in the lowest group in the political field, ranking 138th. Japan also ranked 123rd in the economic field, reflecting the labor participation rate and the gender gap in wages. In the education sector, the country also fell in rank to 47th place due to a lower enrollment rate of women in higher education.

The Gender Equality Bureau of the Cabinet Office, which promotes “women’s activities” rather than gender equality, usually posts a statement on the Gender Gap Index on its website, but although Japan’s ranking in the Gender Gap Index of 125th/146th countries (announced on June 21, 2023) is posted, the rankings for each field have not yet updated as of June 24.

Discussion Point 1: “Japan’s ranking in the Gender Gap Index is 125th/146th, a drop of nine places from 116th place last year and a record low.”
Since the Gender Gap Index rankings are relative, it is only natural that the country’s ranking would be lower than the speed at which the gender gap in other countries is improving. The main reason for this is that the ranking in the areas of “Politics” and “Economy” has not improved at all from its very low ranking position, compared to “Education” (99.7%) and “Access to Health Care” (97.3%), when looked at by sector.

METRICAL: Share Buybacks Are Likely Due to Reduction of Shares in Retirement Benefit Trusts and Policy Holdings

Since the disclosure regarding retirement benefit trusts was made by NSK on April 20, I would like to share my thoughts on the issue of policy shareholdings and deemed shareholdings held in retirement benefit trusts.

On April 20, NSK issued a disclosure titled “Notice of Partial Return of Retirement Benefit Trust.” The contents of this disclosure were as follows: “The pension assets including the retirement benefit trust are significantly overfunded in relation to the retirement benefit obligation, and this situation is expected to continue in the future, so we sold part of the shares in the trust in the fiscal year ending March 31, 2023. The partial return of the retirement benefit trust is expected to result in an extraordinary gain of approximately 10 billion yen in the non-consolidated accounts (there will be no impact on the consolidated income statement for the fiscal year ending March 31, 2024).”

Director Skills in Japan: The Picture Worth 1,000 Words

Take a look at the chart below, from materials recently published by the FSA’s Committee on the Stewardship Code and the Corporate Governance Code.  This is from an analysis of ALL directors (both executive and non-executive) at TSE1 firms that disclosed a skills matrix in 2019.  From left to right, the categories are: a) technology; b) finance and/or accounting; c) executive management experience; and d) global (international) experience.  Can you guess which country is the dark blue bar?  Yep, that low guy is Japan. Right across the board.

Director skill gaps in Japan - BDTI

METRICAL : CG Stock Performance (Japan) for April 2023

The solid U.S. stock market, which has settled down from last month’s financial system unrest, led Japanese stocks to move higher toward the end of the month.
The CG Top20 stock price index significantly outperformed both TOPIX and JPX400 for the second consecutive month.

The stock market rallied toward the end of the month on the strength of U.S. stock prices as U.S. stocks gradually calmed down from the financial system unrest triggered by the failure of the Silicon Valley Bank in the U.S. On the last day of the month, the Bank of Japan’s monetary policy meeting maintained monetary easing, and stock prices rose sharply.

Outside Director Lessons #4: What is Worse Than the Company Going Under?

Here is an example of the sort of thing that can happen at mid-size companies in Japan. Let’s say that at the time when you join the company as an outside director, the son of the founder is the CEO.  The son is an engineer by training, but when his father became too old to lead the company, the son took his place. The son is the nicest, most gentle man in the world, but he does not have enough management experience or the character to serve as a decisive leader at a time of disruptive technological change.  It is clear to you that that he will have to step down, and the board will have to find someone from the outside who has more managerial experience and decisiveness.

At that point, your self-appointed job becomes “finding a soft, smooth way to persuade the CEO to step down”. 

Outside Director Lessons #3: How Suddenly Companies Can Collapse!

As its sales increased, Alps had financed its growing working capital needs by borrowing from banks.  But no bank wanted to be a “main bank” for a small unlisted company any more. So every year or so we added another bank lending us 200 million yen or more, until we had something like six or seven different banks. All of these loans were short-term, and had to be “rolled over” each year.

As long as all the banks rolled over their loans each year, and we were able to find a new bank when we needed it, to the board, everything seemed fine.

Outside Director Lessons #2: My First Experience as an Outside Director

Why do I think director training is so important to Japan’s future? Because I have seen so much of what goes wrong behind the scenes, and the losses and pain that are caused, when boards do not function well here. I have a lot of “scar tissue”, as we say in English.  What is really interesting, is how many commonalities there are in the causes for inadequate governance.  The size of the company, and its industry, really do not seem to matter. It is the reverse of Tolstoy’s quote, as if “all Japanese boards that succeed do so in a different way, but all boards that fail, do so in the same way”  If so, one would think this should make it easier to avoid governance failures.

My first experience as an outside director in Japan began in the year 2000, when the M&A advisory boutique that I led at that time, JTP Corporation, advised the US firm of MapInfo to conclude a strategic alliance and invest in a 25% capital raise by Alps Mapping in Nagoya.  Alps (as it was known in Japanese) was an unlisted firm that was the third largest map publisher in Japan, and had excellent map data.  The company was planning to go public at some time in the future.  Because MapInfo had no staff in Japan at the time, I was nominated by MapInfo to serve on the board of Alps going forward, to protect not only its interests but also those of  other shareholders, because MapInfo had no staff in Japan at the time.

Outside Director Lessons #1: Genesis of Director Training Nonprofit BDTI

On 4/16/2023 I will be 67 years old. On this “occasion” I would like to ask you to consider donating to The Board Director Training Institute of Japan (BDTI), which I have led in offering director training in Japan for 13 years now, training more than 2,700 persons in programs, and many more via e-Learning.  At the same time, going forward, I also will attempt to make a series of posts (on this discussion forum) a perspective or story related to corporate governance, based on recent events and my own 15 years of experience sitting on boards here, that will be light, easy reading but hopefully also be thought-provoking.

BDTI’s work is “missionary work” that requires passion and commitment. Perhaps these stories will be of interest in terms of revealing why I do what I do, the challenges that face Japan and its companies and investors, and how how they can be overcome.

Because Japan does not have a customary or mandatory requirement for serious director training, BDTI’s courses need to be “subsidized” in some way  so that we can offer high-quality programs at a price point that is low enough to attract our (overly frugal) customers, –that is to say, at prices that on a per-person-per-hour basis are one-third or less than in other developed markets.  (Even paying low salaries and donating a lot myself, this is the market reality). Moreover, “G” is the foundation on which the “house of ESG” is built, but that fact is not as widely recognized as it should be.

BDTI Director Training for Women Initiative 2023


The Board Director Training Institute of Japan (“BDTI”) will again announce this year an initiative to sponsor board director training courses for women. The goal of the initiative is to equip highly qualified female leaders with the skills and training needed to succeed as board directors, and to proactively address the imbalance in board gender diversity in Japan by growing the pool of board-ready, qualified female director candidates.

Starting April 3rd, for qualified women who enroll to take any of BDTI’s director training courses as described below, one of the generous sponsor companies will cover all costs.  These Japanese and English-language training programs have been designed by leading experts in Japan to prepare candidates to serve as directors, statutory auditors, and executive officers in Japan. We look forward to many qualified woman taking advantage of this opportunity to receive director education.

Information &  Procedures for Application


Accepted from April 3, 2023 until funds depleted. Sponsors will determine whether to award scholarships to applicants. Scholarship applications are reviewed on a first-come, first-served basis, so please send your outline resume as soon as possible.

BDTI Update, Plans for Next Year, and Scholarships Initiative

As the pandemic wound down through 2022, BDTI returned to in-person training. During FY2023, fully 55% of the participants in our “open enrollment” programs were women, thanks in large part to a generously sponsored program that funded “training scholarships” for women. The year before, the equivalent figure was only 32%. We would like to maintain this level of 50%+ female participation in order to spread knowledge of governance and directorship skills throughout all of Japanese society, which is BDTI’s core mission, and to promote the active inclusion of women in director and executive roles as part of that mission.

According to a METI survey, only 20% of listed companies are “taking action on director training”. In addition, while the CGC and related rules have enhanced disclosure, this new data is significantly underutilized. In FY2023, BDTI plans to intensify its activities to increase the quality and breadth of its programs, and to provide disclosure “big data” which facilitates effective stewardship and thereby improves the economy. To achieve our goals, we need to ask for your kind financial support.

We are pleased to report on our activities through March 2023 and our planned activities for the fiscal year 2023. The same information is also available in PDF format.