Norway’s SWF Nixes All-Male Boards In Japan

Norway’s sovereign wealth fund is pushing to increase gender diversity among Japan's corporate executives.

In April, Norway’s sovereign wealth fund said it would vote against all-male board nominations of Japanese companies in its portfolio, a step aimed at increasing gender diversity at the highest levels of corporate Japan.

“We believe in diverse boards and expect a minimum of 30% representation of women,” said Carine Smith Ihenacho, the chief governance and compliance officer at Norges Bank Investment Management (NBIM), in a statement.

“NBIM,” she continued, “has voted against companies in Europe and the US due to lack of women on boards. Now we will do the same in Japan, starting with companies with all-male boards, affecting around 300 companies.”

NBIM is the investment management division of the Norwegian Central Bank, tasked with investing the Norwegian Government Pension Fund Global, and had 14.7 trillion Japanese yen in (about $10.5 billion) 2021 invested in Japan, the second-largest nation with exposure to the fund.

In 2022, the investor held shares of some $64 billion in 1,533 listed companies in Japan, or around 4% of the total foreign ownership in Japanese shares, the Nikkei reported. NBIM’s policy will start this year, while board elections in Japan usually take place in June.

Japan Inc. business expert Rika Nakazawa notes the move by NBIM, the world’s largest sovereign wealth fund, with $1.25 trillion of assets under management, will speed up gender diversity in corporate Japan and globally. “With the motion, we might perhaps see other investment groups follow suit—to galvanize greater action and achieve better and accelerated outcomes,” she says.

Nakazawa has extensive experience in corporate Japan and the US. In her 2021 book, Dear Chairwoman: Letters From Today’s Trailblazing Women Board Leaders to the Fearless Directors of Tomorrow, she records the voices of women on boards around the world.

“According to Spencer Stuart’s 2022 Nordic Board Index in Norway, 39% of all board members across the region were women, a slight increase from 37% in 2020 and 38% in 2021,” Nakazawa points out. This stands in stark contrast with Japan, she adds, which is in “one of the lowest positions of the G20 in terms of gender-diverse board composition.”