JFBA Brief Note - Corporate Governance and Appointing More Female Attorneys as Outside Directors for Companies
One of the key elements of the revisions to the Companies Act conducted in 2014 is the suggestion of establishing outside directors in Japanese companies to strengthen the corporate governance thereof. Although the enforcement of such establishment has not been made mandatory in the revised Act, it has been decided that, if outside directors have not been appointed by the end of this fiscal year, the company “is required to explain the reason why appointing outside directors is not appropriate” at the shareholders’ meeting. Such rule will be applied to all public and large companies in Japan.
Women are attracting attention as candidates for such outside director positions. At a seminar regarding corporate governance conducted at the IBA Annual Conference held in Tokyo in October 2014, the importance of ensuring the independence of outside directors as well as fostering diversity among outside directors by appointing women and foreign nationals was pointed out.
Further, the government’s “Japan Revitalization Strategy” has been leading the move toward an increase in the appointment of women to the positions of directors and officers. In the Strategy, “promoting women’s active involvement in the workforce” is placed as a key measure for bringing about the revitalization of Japan’s economy. In response thereto, the business world, has initiated an independent effort in promoting such active involvement of women. In addition, information disclosure concerning the situations surrounding the female workforce in companies has been progressing, and it has now been made mandatory for the ratio of female executives to be stated in asset securities reports, etc. In reality, however, there are a number of companies which are having difficulties in securing female members who can be candidates to become directors, and thus, such companies are likely to firstly appoint women as outside directors.
Amid such circumstances, there has been a growing need for information regarding female candidates who have a level of knowledge, ability and experience suitable for becoming outside directors. In line with such need, the government is to launch a business for providing information regarding such human resources. Such business will tentatively be named “Habataku Josei Jinzai Bank” which can roughly be translated as Female Human Resources Bank Assisting Further Active Involvement of Women. In response to the request for cooperation with such business, the JFBA has been undergoing preparations for the operation of such business by creating and providing a list of female attorneys who could be suitable candidates to become outside directors. Each bar association will specifically make a list of female member attorneys meeting the criteria qualified to be placed on the list, namely their number of years of practice as well as the fact of their having taken certain specified training programs. Specifically, information such as the name, contact details, career and main fields of legal practice for such female member attorneys will be entered in such list. Three bar associations in Tokyo (the Tokyo Bar Association, Dai-ichi Tokyo Bar Association, and Daini Tokyo Bar Association) and the Osaka Bar Association have already created lists of candidates, which can be viewed on the JFBA website.
In order to fully realize the “active involvement of women,” we sincerely hope that these attempts will prove successful and that female attorneys who have and will become outside directors will fulfill their expected roles sufficiently. Furthermore, I hope that the effectiveness of attorneys (not limited to female attorneys) becoming outside directors will become widely recognized in corporations and throughout society.