Tapping Potential: Encouraging Women’s Empowerment in the U.S. & JapanApril 2, 2014
Yoriko Kawaguchi, Professor, Meiji Institute for Global Affairs, former Member of the House of Councilors, former Minister for Foreign Affairs, and former Minister of the Environment, Japan
Ruth Porat, Executive Vice President, Chief Financial Officer, Morgan Stanley
Carol Gluck, George Sansom Professor of History, Columbia University; Member of the Board of Directors of Japan Society
On April 2, 2014, Japan Society hosted an engrossing discussion on the role of women in business and government with Yoriko Kawaguchi, Professor at the Meiji Institute for Global Affairs and former Foreign Affairs Minister and Environment Minister of Japan; Ruth Porat, Executive Vice President and Chief Financial Officer of Morgan Stanley; and Carol Gluck, Sansom Professor of History at Columbia, who served as moderator.
Japan's Call for More Women in the Workforce
Prime Minister Abe's growth strategy for the Japanese economy includes a call for increasing the number of women in managerial positions to 30 percent by 2020, Professor Kawaguchi noted.
The appeal has gained much notice. "Scarcely a day passes in Japan without some articles appearing on gender issues in major newspapers," she said. Dai-ichi Life Insurance announced that in its next group of 200 being promoted, 30 percent will be women, bringing the total number of female managers to 700, or about 18 percent of all managerial positions.
Keidanren is asking member companies to draw up voluntary programs for promoting women to positions of leadership, with the chosen targets "made public and checked against actual performance."
"In Japan there is now an Internet home page that gives transparency as to which companies are more gender sensitive by making public individual company names and giving specific numbers. Amazingly enough, this site is run by the government," she said.
Quantity. The first aim of the 2020/30 strategy is to add numbers, Professor Kawaguchi explained. If current trends continue unchanged, the Japanese labor force will shrink by 42 percent by 2060. "Even if we succeed in bringing the female labor participation rate of those between the ages 30 to 49 to as high as Sweden’s, which is the highest among developed countries, and even if we retain seniors in the labor force until age 65, the Japanese labor force is estimated to still decline by 27 percent in 2060."
Quality. The second aim is to improve the quality of the labor force. More women in the workforce means more diversity; and "a heterogeneous element can stimulate and stir a society" to change and make progress more rapidly.
Justice. The third goal is to support fairness in Japanese society. "Especially in light of gender developments elsewhere in the industrialized world, Japan can no longer afford to do without the contributions of Japanese women toward making Japan a more just society."
Professor Kawaguchi's own career benefited from the Japanese government's faithfulness to the seniority system and lifetime employment, she observed. When her two children were born, she continued working in government and was promoted along with the men in her cohort.
These systems, however, "are two-edged swords." Because of the seniority system, women who leave the workforce for a few years to raise their children have a hard time landing a position when they want to return. "Even if you succeed in finding a job, you are apt to lose most of your past working years, and therefore your earnings are smaller, and your promotions delayed."
Differential wage structures are illegal in Japan, but are still common: "As recently as 2012, women on overall average were paid 70 percent of what men received."
Policy changes that will bring more women into the workforce include more daycare centers, more afterschool care programs, help for women who want to go back to work and to start new businesses, "and a better work-life balance for both men and women." Additional revenue from the consumption tax increase that goes into effect this spring will be devoted in part to building new daycare facilities for 400,000 children within five years.
U.S. Numbers: "An Embarrassment"
Ruth Porat of Morgan Stanley noted that the Civil Rights Act of 1964, which prohibited discrimination on the basis of gender, race, color and religion, was a catalyst for important change in the U.S. However, she continued, “as the data underscore very poignantly, more needs to be done." She added, "Fifty years ago women in the U.S. earned 59 cents for every dollar earned by men. Today they earn about 80 cents on the dollar for similar jobs. It’s an improvement, but not acceptable."
At Fortune 500 companies, women hold only 15 percent of executive officer positions and 17 percent of board seats. Less than 5 percent of Fortune 500 CEOs are women.
Ms. Porat said, "Although the statistics in the U.S. are meaningfully better than they were 50 years ago, and better than in many other markets, they’re not where they should be, and, in fact, I would say they are an embarrassment."
Structural Changes: Proper Work-Related Policies. It is very important to ensure that women are not forced to choose between family and work. One critical policy at the federal level would be a paid family leave policy that makes it easier for women to take time off to care for their families. The U.S. trails much of the world by not having a federal paid family leave policy. As Ms. Porat noted, "the data are staggering": only 12 percent of private-sector workers have paid family leave and less than 40 percent have access to short-term disability leave. For those who get to take maternity leave, it is often brief—in 2012, nearly a quarter took less than 10 days.
"In the absence of broader government leadership, businesses have stepped in," Ms. Porat said. Morgan Stanley has put in place generous policies for employees "because we know we need to create an environment in which women can thrive professionally and personally if we strive to change the percentage of women at the top of our firm, which we do and we have."
Accountability: Governance and Processes. "I very much agree with" Sheryl Sandberg's advice to women to 'lean in' and pursue the careers they dream of," Ms. Porat said.
"However, I think there is an important corollary to that advice. If a woman leans in, but is leaning against a door that is nailed shut, no amount of leaning can bust down the door. And so I think we must hold our organizations accountable where they control the doors by demanding clarity and transparency around succession planning.... We need to implement processes that are fair, transparent and logical to develop and nurture the most diverse set of leaders."
Research indicates that "the additional productive power of women entering the workforce since 1970 accounts for about one quarter of U.S. current GDP," she said. Other studies have found that the average return on equity for companies with high representation of women in executive committees was about 50 percent higher than for those without women on their senior leadership teams.
Role Models. "It’s easy to underestimate the power of role models," Ms. Porat reflected. "There is a multiplier effect from every qualified senior female leader." Madeleine Albright becomes the first woman to serve as U.S. Secretary of State, Janet Yellen becomes the first woman to chair the Fed, and when they do, "it becomes so, 'Of course. It should happen that way.'"
In the mid-1980s, Ms. Porat was newly married and commuting from New York to Philadelphia to finish her Wharton degree when she was hired as an associate in M&A at Morgan Stanley. Ten years later, she was running the technology equity capital markets business and about to move to her next position within the firm. From a colleague, she learned about some of her reviews written by those who interviewed her back in 1986. "Several of the reviewers at that time expressed concern that I just wouldn’t have the stamina to make it past the associate level."
"What really struck me then, and I think of often, is that even with strong credentials, and what some have called a pretty absurd drive, I didn’t represent the image of what they thought was someone who would make it beyond the associate level. Now, I’m quite confident I’ve outlasted those men who questioned my stamina. Not only that, I’ve surely defied the Neanderthal reviewers, because I have three kids, and I’m still married to the man for whom I commuted to Wharton 30 years ago."
"Never in my career have I seen more focus on this topic at the national level and at the corporate level. I find it inspiring and encouraging," she concluded.
Professor Gluck began the Q&A:
What do you need in Japan, concretely, to close the gender gap? Is Prime Minister Abe's goal of 30 percent by 2020 enough?
"The changing of minds I think comes slowly," Professor Kawaguchi responded. Japan needs more women in the workforce and in leadership roles "to survive—literally." Yet "it does take time for some people whose husband has a nice income, whose wife is at home in a beautiful home, beautiful children," to gain faith in a new set of customs and norms, to become convinced that everyone, women, men, companies, will benefit.
Professor Kawaguchi sent her own children to a very good public daycare center, with four teachers or nurses for 13 one-year-olds. "I felt that my children were much better off being there than under me," she confessed. Getting more centers up and running will take time. Rules on things like minimum acreage may need to be adapted so daycare centers can be built "right in the city near the stations where it is convenient for mothers who go to work to leave their children."
In the U.S., a national family leave policy is needed, but would not be sufficient, Ms. Porat commented. "What’s driving diversity, and really empowering more companies to embrace the importance of diversity, is it’s a business imperative."
"There has been quite a bit of academic research that says, 'If you want innovation and an edgy approach to work, you don’t want people around you who all think like you.'" Companies must be serious about succession planning. Selection processes must be transparent, "so that you're addressing the unconscious bias" that affects how a candidate is evaluated.
How do we get the women into these leadership positions?
These are "very different conversations," Ms. Porat reflected. "It's a risk/reward analysis. And we see it quite a bit I think in business here in the U.S."
"If I have a fair shot at rising up through the ranks" and working at "something that I view as intellectually stimulating and consistent with what I did when I graduated from college, and what I did before I had a child, then it starts to become a real discussion." If there isn't that fair shot, "I’m not going to do it, because it’s very meaningful to be at home."
Professor Kawaguchi pointed out that in fact there is a whole group of women in Japan who started their careers when the Equal Employment Opportunity Law was passed almost 30 years ago, who are well trained and able, "who are waiting, who could be there if the opportunities are given to them. I am rather optimistic about the change in 10 years' time."
There was a big gap in the 1990s because the first group to get hit by the recession was women. But still, things can happen fast--they’re just not going to happen at the government say-so. Don’t take this personally, but the reason that big corporations like Morgan Stanley do this is because they know that society approves of it, that it has a value in society. That’s a change.
"I absolutely agree," Ms. Porat responded. "More and more we speak internally about the fact that clients want to see a diverse team. They want to know that we’re bringing diversity to them, diversity of thought, that we represent what their companies look like, their global companies."
"I have to tell you that when I was finding a job after I graduated, and that was way, way, way back, and I’m not going to tell you when that was, but I called up one company, and they said, 'We are not going to hire a woman,'" Professor Kawaguchi said. "So, I ended up in the government, which did not say anything like that."
"When I look at my career, and I’m often asked how did I rise up through the ranks, yes, I was driven, but I always credit my sponsors, people who took a risk on me," Ms. Porat said. "And they were all men" because there were very few senior women.
"On work-life balance... I don’t like the term balance. I think that we’ve never had balance. I’ve never had balance," Ms. Porat added. "You can stay at home and you’re tipped one way or work until midnight and you’re tipped another. But the goal is to get a mix that works in life where you do have the life that you want, and you do have a career that’s rewarding.... If you get the opportunity to come back but it’s a dead-end role, you’re not going to want to come back.... It’s got to be a mix that truly gives you what you need professionally and personally."
And the mix changes over the lifecycle?
"Absolutely," Ms. Porat said.
In the early childrearing years you need more on the home side. Working until midnight is okay at certain ages.
And it’s both men and women. You’re optimistic. Are you optimistic?
"I am optimistic, but I think that we need to be very clear about what needs to be done within organizations," Ms. Porat said. "The very systematic programs—we should all be sharing best practices, because if we don’t work conscientiously at it, it won’t happen."
Why is it that we get the impression from outside that women have a hard time in the workplace in Japan? I have to just keep pressing. Isn’t that what we all read? Isn’t that what you young Japanese women feel? I need to hear you talk about that. I know that’s what's in our heads a lot.
"What exists probably is that Japanese women are not as confident as maybe American women are about themselves," Professor Kawaguchi said.
I don’t find young Japanese women lacking in confidence at all. I find them lacking in opportunity.
"To be fair," Ms. Porat said, "even in the U.S. there are times where I have offered a new role to a woman, and she said, 'I don’t think I’m ready,' and my response is, 'I don’t think I would have offered it to you if I didn’t think you were ready.' So, I think your point is well taken."
At Morgan Stanley in Japan, with a focus on talent development and career planning, now more than 20 percent of officers in Japan are women.
Members of the audience joined the dialogue:
One possible explanation for what keeps women in Japan from actually being able to express themselves is an element of social pressure, both explicit and implicit, not something conscious.
"There was some research at Stanford University on this topic that’s called stereotype threat, which for me really resonated," Ms. Porat responded. Stereotype threat refers to the anxiety that people feel when their performance has the potential to confirm a negative stereotype about a social group. "For example, he took white men and Asian men, gave them a math test, and when he didn’t tell the group there was any difference between the results, white men did not do well on the math test, because there were Asian men sitting next to them. The self-stereotype was, 'I couldn’t do as well as an Asian man.' But when you told them that there was actually no statistical difference, the men did well."
The researchers repeated the experiment with women and men, with comparable results, she said. "We can self-defeat unless that stereotype is explicitly addressed. And I think it can be addressed. And I think it can be addressed through role models, it can be addressed through messaging."
From my anecdotal observation, there seems to be a brain drain of Japanese women who go abroad seeking careers, because there is more opportunity for talented Japanese women abroad than there is in Japan. Would you agree?
Professor Kawaguchi replied that when she worked at the World Bank, there was a much higher percentage of Japanese women in leadership positions than back in Japan. "But I don’t think that’s a bad thing. It’s very good for Japanese nationals to be all over, working wherever people are accepted, wherever people can function. That’s fine. If Japan realizes as a society that is a loss, then we will change it, and certainly we are about to change."