The Plight of Women in Positions of Corporate Leadership in the United States, the European Union, and Japan: Differing Laws and Cultures, Similar Issues

Cindy A. Schipani is Merwin H. Waterman Collegiate Professor of Business Administration and Professor of Business Law at University of Michigan Ross School of Business. This post is based on a recent paper authored by Professor Schipani; Bettina C.K. Binder, Professor of Business Administration and Engineering at Pforzheim University; Terry Morehead Dworkin, Wentworth Professor of Business Law, Emerita, at Indiana University and Scholar in Residence at Seattle University School of Law; Niculina Nae, Professor of International Studies at Nagoya University of Commerce and Business; and Irina Averianova, Professor of Communications at Nagoya University of Commerce and Business.

Gender diversity on corporate boards is a highly debated issue worldwide. In addition to providing equal opportunity, promoting equality and inclusion of women in positions of leadership is also believed to have positive effects on the financial performance of a company. National campaigns such as “2020 Women on Boards” in the U.S., or “Women on the Board Pledge for Europe” in the EU are just two examples of initiatives that aim to increase female representation in boardrooms. Rising female representation on boards has been identified as a trend for 2020 (Pedro Nueno, 10 Trends for the Board of 2020: The Future of Governance, Harv. Bus. Rev. (2014)), while board configuration is considered to be a “strategic resource of the organization” (Coral Ingley & Nick van der Walt, Board Configuration: Building Better Boards, 3 Corp. Governance: The Int’l J. of Bus. in Soc. 5 (2003)). The European Commission stresses the economic importance of gender diversity on corporate boards, quoting several studies showing correlations between women’s presence on boards and various improved financial metrics. Japan’s Act on Promotion of Women’s Participation and Advancement in the Workplace, enacted in 2016, lays a foundation for establishing targets for promoting women to decision-making positions (Act on Promotion of Women’s Participation and Advancement in the Workplace, Law No. 64 of 2015). Furthermore, we agree with those who argue that the status quo ought to be challenged in international business, both in terms of economic importance and for considerations of equal opportunity and fairness (Patrizia Zanoni, Maddy Janssens, Yvonne Benschop & Stella Nkomo, Unpacking Diversity, Grasping Inequality: Rethinking Difference Through Critical Perspectives, 17 Org. 9 (2010)).

In our paper entitled, The Plight of Women in Positions of Corporate Leadership in the United States, the European Union, and Japan:  Differing Laws and Cultures, Similar Issues, forthcoming in 26.2 University of Michigan Journal of Law and Gender, we compare gender issues in corporate leadership among the United States, a sampling of countries in the European Union and Japan. There are multiple reasons for this selection of jurisdictions for our comparative analysis. First, all three jurisdictions reflect highly developed industrial powers with well-established corporate cultures. Second, each jurisdiction has a noteworthy history of tackling the problems of gender equality and more or less established recognition of women’s potential to contribute to the economic and social development of their countries. For instance, the principle of equal pay, which implicitly contributes to gender equality, has been enshrined in the Treaty establishing the European Economic Community already in 1957. Third, women in these geographical areas belong to the most educated in the world and economically are self-sufficient. Finally, despite the industrial progress of these jurisdictions, none of them can boast of creating a sufficiently supportive environment for women to rise to positions of leadership.

This examination of three of the most developed economies illustrates that development does not equate to equal opportunity and advancement for women in business. Although Japan, the European Union, and the United States have all seen progress regarding advancement of women in employment, that progress has been slow and often difficult. At present, women in the European Union seem to be faring best.

Women working in the European Union appear to be in a better position both in terms of the number of women in leadership positions and the diversity of industry and types of companies where they work. This can be attributed to the legally mandated or recommended quotas for women in supervisory boards and management. Norway was the first country to legislate board quotas, followed by other European countries, and this translated into positive results: in October 2017, nine EU countries had at least 25 percent women on the supervisory boards of their largest companies and France outclasses this result, as the only EU country in which there were at least 40 percent of each gender at the board level. Quotas, however, are not legally feasible in the United States. Progress for United States women in leadership positions and as corporate board members has mainly occurred through social pressure and the rising economic and political power of women. Japan has seen the least progress toward equality. Whether women venture out of the similar occupational ghettos or stay within them, corporations have found the more insidious dual track career opportunities—managerial v. clerical—which even further contributes to formalizing gender segregation. Japan has no legislated quota system and even meeting the state-recommended percentage of women on corporate boards lags far behind the goals. Additionally, there is an insufficient pool of working women to meet them and a low number of women aspiring to leadership due to the traditional gender role distribution.

Top-down measures and targets alone cannot resolve these issues unless there is also more understanding and acceptance of career women in all walks of life. Pressure to do so will come from the necessity to utilize women’s latent potential to further economic development. The more interaction between women on boards and in management with men in similar positions, the more women will be seen for their capabilities and contributions and as professionals. It is also important to create an environment to bolster women’s career ambitions and aspirations. A powerful way to do this is to provide a mentoring system and significant role models. Another is family-friendly policies such as those in the European Union. These are more likely to happen when more organizations and leaders recognize the economic benefits that result from women on boards and in leadership positions. This, in turn, will contribute to equality and fairness and this should be at the forefront as “empowering women means a more efficient use of a nation’s human capital endowment and reducing gender inequality enhances productivity and economic growth.”

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