However, boards in Japan fall far behind their global peers on gender diversity. We believe boards have a responsibility to reflect the interest of all company stakeholders, and recruiting them from diverse backgrounds is a fundamental part of strengthening a business. We started to engage with the company to discuss gender diversity because its board had no female director. The second case study is a Japan-headquartered company that specializes in human resources and employee services. We will continue to engage with the company on governance and its broader sustainability program. We believe diversity in senior management will help the company better address the needs and concerns of a diversified customer and employee base, thus putting it in a better position to deliver better long-term value. We believe the company has embedded its diversity and inclusion strategy within its culture, and this has acted as a catalyst to promote further diversity on the management board.
It has established a dedicated contact person for its diversity and inclusion strategy, which is monitored by the board, using key performance indicators. The company wants an open working environment in which individual differences are respected, valued and encouraged, as it believes diversity and inclusion lead to better business results. To establish a diverse and inclusive corporate culture and gain better access to more talent, it has developed a company-wide diversity approach. The company has targeted 20% women in its tier 1 management level and 35% within its tier 2 management level. The company’s supervisory board set an objective to have at least one female on the management board by June 2022. The supervisory board oversees and appoints the members of the management board and must approve major business decisions. In Germany, by law, the supervisory boards of certain large corporations are composed of 10 shareholder-elected members and 10 employee representatives. We believe the company has made improvements on diversity and is traveling on a positive trajectory. Finally, we wanted to know how the company was addressing the lack of diversity in the management team. We were interested to find out if the board was expanding its search to source candidates. We asked the company whether, as a retailer with a diversified customer base, it had an appropriate gender balance on its board.
We engaged with the company to understand its board dynamics and sustainability program. We believed improved diversity at both the board and management levels, and in particular an increase in the proportion of women, would benefit the company and its long-term performance. Theme in focus: Board and management diversityĬase study 1 is a German multi-national food retailer held in our equity and fixed income strategies.
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