Closing the gender gap in Japan, the car industry and the world

Last year at Davos, Prime Minister Shinzo Abe used the opportunity to reiterate his commitment to reinvigorating Japan’s economy, in part by increasing the number of women participating in the workforce. Ever since, he has received some criticism for his ambitious “Womenomics” programme, and admittedly I was among the first business executives to express some scepticism. The administration wants 30% of corporate leadership positions to be held by women by 2020 – an audacious timetable by nearly any global standard.

But make no mistake: whether or not women cross an arbitrary threshold of 15, 20 or 30% of top management jobs within half a decade is beside the point. Abe’s initiative is a significant, badly needed step in the right direction – and I applaud the intention and direction of his aggressive targets.

The boldness of his plan also represents a shrewd communication tactic: if he had asked for moderate “kaizen” improvements of 1, 5 or even 10%, would Womenomics still occupy front-page headlines and be the subject of global focus? Unlikely.

Where are all the women leaders?

Japan has enjoyed incremental increases in female participation in the workforce – particularly in the past several quarters. In fact, the percentage of Japanese women who work is now higher than the percentage of French or American women who work. (According to 2014 statistics from the Organisation for Economic Cooperation and Development, 63.4% of Japanese women work, compared to 63% in the USA and 61.2% in France.) Japan’s historic division of labour – the stereotypical “salaryman” vs stay-at-home mother – died years ago, never to return.

But only a small minority of Japan’s working women enjoy leadership roles, and the pay gap is one of the largest in the industrial world. This is precisely what Abe wants to change, with a bill that would require all companies with more than 300 employees to set numerical targets for women in management positions.

Setting the benchmark

The Renault-Nissan Alliance has a lot of experience in this regard. We are one of the few companies that publish annual updates on female advancement so that employees – and potential recruits – can track our progress.

Last quarter, we announced that women accounted for 10.6% of Nissan’s manager-level positions globally in fiscal year 2013, up from 10.3% in fiscal year 2012. In Japan, women at Nissan accounted for 7.1% of such positions, up from 6.8% in the previous year – more than quadruple from its level in fiscal year 2004 (1.6%). Nissan aims to raise that figure to 10% by 2017, in line with its ratio globally.

To hit our goal of 10%, we have created professional development and mentorship programmes for women. We have implemented a work-from-home initiative and expanded our employee childcare facilities. Nissan now operates one of the country’s largest corporate daycare facilities, at our technical centre in Atsugi.

Nissan has become an industry benchmark in our home market; our percentage of women managers is more than double Japan’s national average for large manufacturers. The Tokyo Stock Exchange has recognized Nissan as a “Nadeshiko Brand” for the past two years for our support and promotion of women. And that recognition has an immediate payoff in our ability to recruit the “best and brightest” women graduates from top universities.

While we have made a special effort to increase the percentage of women in managerial roles at our company in Japan, our diversity efforts are global. At Nissan’s partner company Renault, women accounted for 18.4% of manager-level positions globally in 2013, up from 17% in the previous year. Women accounted for 19.3% of the company’s 2,000 key global positions, up from 17% in 2012.

These numbers are better than those of our industry as a whole – but are they enough? No. We are far from closing the gender gap, which remains one of my top priorities.

Why gender parity makes sense

Hiring and promoting talented women is the right thing to do for society – and it’s an economic imperative for Japan. According to the Cabinet Office, Japan’s population will decline at least 30% through 2060 – from 127 million people in 2013 to 87 million in less than half a century. Meanwhile, the percentage of elderly people will go from 25% of the population to nearly 40% in the same period. We can only care for our most vulnerable citizens if all working-age Japanese citizens contribute fully.

Closing the gender gap is also the right thing to do for our customers: women are considered “influencers” on 80% of all new-car purchases, according to consulting firm Frost & Sullivan. That means they either buy the vehicle outright or have “veto power” on a man’s purchase – in four out of five new-car purchases globally.

To increase its appeal to women, Nissan last year launched its “Ladies First” retail programme. At Ladies First dealerships, we employ double or triple the usual number of women in staff positions. Our Fuchu flagship features stylish interiors, a nursing room and a spacious area where children can play, and is aimed at making the shopping experience more welcoming to women and first-time buyers. Nissan will roll out 300 Ladies First dealerships across Japan by the end of fiscal year 2015.

In France, we are integrating women at the engineering and design level. For the first time in the Alliance, we created a product team for the Renault Captur evenly split between men and women. Half of the team members dedicated to the crossover’s engineering, design, marketing and sales were women, the highest for any Renault car. Captur is now Europe’s most popular compact crossover.

Hiring women is good for Japan, good for our company and good for the global economy. Companies with at least one woman on the board have a higher return on equity than those without women, according to a Credit Suisse report, which analysed data from 2005 to 2011.

We encourage the Abe administration to stick to its aggressive targets and provide transparent updates about its progress. We look forward to the time when Renault-Nissan – and Japan – have fully closed the gender gap.

Author: Carlos Ghosn is the Chairman of the Renault-Nissan Alliance, a partner of the World Economic Forum’s Gender Parity Programme.

Image: A woman, dressed in ceremonial kimono, poses for pictures before ringing a bell during the New Year opening ceremony at the Tokyo Stock Exchange (TSE), held to wish for the success of Japan’s stock market, in Tokyo January 5, 2015. REUTERS/Yuya Shino