Teiko Kudo has come a long way from her days at a Sumitomo Bank branch in the 1980s, when clients often asked her to hand the phone to a male loan officer because she was a woman. Last month she became the lender’s first female top manager, promoted to a level shared by 88 men.
“The start of my career was a struggle,” said the 49-year-old who was named a director last month at Sumitomo Mitsui Banking Corp. (8316), recalling how she had to serve tea despite being one of the first women hired for career-track positions under Japan’s 1986 Equal Employment Opportunity Law. “Now I go to meetings surrounded by male executives all wearing dark suits, which can be nerve-racking.”
Japan’s second-largest bank, along with the country’s two other largest lenders, all based in Tokyo, have appointed their first women into senior ranks, a total of four since June. The moves come after a call last year by Prime Minister Shinzo Abe for companies to move women up management ranks as part of his efforts to revive the economy.
In Japan’s finance industry, women hold just 0.3 percent of executive positions, compared with a 3.3 percent average in private industry, according to a survey published in February by the Japan Women’s Innovative Network, a nonprofit research group on diversity issues known as J-Win. In the U.S., women hold 12.4 percent of executive positions at financial firms, according to Catalyst Inc., a New York-based research group.
“Banks have been the most-stubborn and conservative industry,” said Mariko Kawaguchi, a researcher at Daiwa Institute of Research Ltd. in Tokyo. “But being slow to change is still much better than doing nothing.”
As in the U.S., none of the country’s biggest lenders is run by a woman. Even South Korea, where women’s participation in the workforce is below Japan’s, has had a female chief executive officer at a bank since December, at Industrial Bank of Korea. Five women are CEOs of Indian lenders, including the largest, State Bank of India, and second-largest, ICICI Bank Ltd.
Mitsubishi UFJ Financial Group Inc. (8306), Japan’s biggest lender, was the first to move, last June appointing Yuko Kawamoto, 55, to become the first woman to sit on the board of one of the country’s so-called megabanks. Kawamoto spent 15 years at consulting firm McKinsey and Co. after four years at Bank of Tokyo, the predecessor of Mitsubishi UFJ.
Mizuho Financial Group Inc. (8411) last month named Hiroko Ota, 60, a former economic and fiscal policy minister, as external director and chairman of the board of directors. Her appointment is subject to shareholder approval in June.
Also last month, Mizuho’s banking unit appointed its first and only female executive, Atsumi Arima, 51, to a rank held by 83 men at the lender. Arima joined Dai-Ichi Kangyo Bank Ltd., which later merged with two other banks to form Mizuho, in 1986 as part of the lender’s first female career-track positions.
“Considering the workforce in the future, increasing women’s participation is an important measure in Japan,” said Nobuyuki Hirano, chairman of the Japanese Bankers Association who’s also president of Mitsubishi UFJ, in a March interview.
“I wouldn’t be surprised if the ratio of women to men in managerial positions became equal to the overall male-to-female ratio at our bank,” Hirano said. “I’d like to offer the best chance of promotion to those female employees who want to be promoted.”
Women made up 57 percent of employees at financial firms and insurers last year, the highest percentage of all eight industries tracked by J-Win in its report showing an average of 38 percent female employees.
Banks’ record in promoting women reflects the nation’s industrial infrastructure, said Toshihiro Nagahama, chief economist at Tokyo’s Dai-Ichi Life Insurance Research Institute.
“When Japan was relying on manufacturing and construction, banks thought it’s better to let male staff deal with their corporate clients because they were mostly run by men,” said Nagahama. “As the economy shifts to services, where more women are successful, lenders will be forced follow the change.”
About 11 percent of managerial jobs in Japan are held by women, according to a report released by the Ministry of Health, Labor and Welfare in January. That compares with 43 percent in the U.S., 39 percent in France and 35 percent in Sweden, according to the report.
Women accounted for 14.8 percent of managers at Mitsubishi UFJ’s lending arm as of April. Mizuho intends to boost women in managerial positions to about 15 percent in two years from 13 percent in March 2013, according to company data.
Regardless of gender, employees who join Mizuho for career-track positions will gain sufficient experience to qualify for promotion to executive levels, Masako Shiono, a Tokyo-based spokeswoman for the bank, said by phone. Yuji Okumura, a spokesman for Mitsubishi UFJ, declined to comment on promoting women into senior ranks.
At Sumitomo Mitsui’s banking unit, 10 percent of managers are women, President Takeshi Kunibe said at press conference in March. The company hasn’t set a goal to increase that percentage. It makes promotions “based on personality, skills and performance” regardless of gender, Tomoyuki Narita, a spokesman for Sumitomo Mitsui, said in an e-mailed response.
Shares of Sumitomo Mitsui closed 0.7 percent lower at 4,185 yen in Tokyo today. Mitsubishi UFJ lost 0.7 percent to 574 yen, while Mizuho rose 0.5 percent to 204 yen.
The World Economic Forum ranked Japan 105th out of 136 nations in its 2013 Global Gender Gap Report, which measures differences between men and women in economic, educational and other areas. Iceland was No. 1, followed by Finland and Norway.
Japan, facing a shrinking and aging population, needs to empower women in the workforce to ensure the country’s economic revival, Abe has said. He has called increasing women’s participation a “vital component” of his growth strategy, and plans call for eliminating waiting lists for childcare and training mothers returning to work.
Closing the gender employment gap could boost Japan’s gross domestic product by as much as 13 percent, according to the latest “Womenomics” report last week by Goldman Sachs Group Inc.’s chief Japan strategist, Kathy Matsui.
Japan is the world’s fastest-aging nation, with almost 26 percent of its population 65 or older, a proportion double the group 15 or younger, National Institute of Population & Social Security Research estimates show.
Abe has encouraged publicly traded companies to have at least one female executive and has set a goal of women holding 30 percent of leadership positions in all areas of society by 2020, when Tokyo hosts the Summer Olympics.
In the U.S., ranked 23rd in the Gender Gap Report, Morgan Stanley (MS) Chief Financial Officer Ruth Porat called the low number of women running American companies an “embarrassment” in an appearance last month at the Japan Society in New York. Hirano, the Mitsubishi UFJ president, was on Morgan Stanley’s board when Porat was appointed CFO in 2009.
Women accounted for 14.6 percent of executive officers at the 500 largest U.S. companies in 2013, little changed from the previous year, according to a Catalyst report. Women held just 4.8 percent of U.S. CEO positions and 17 percent of board seats, Catalyst data showed.
The seniority-based promotion system at Japanese companies, combined with traditional notions that women stay home to do housework and raise children, also has kept women behind their international counterparts, Tetsuo Kitagawa, a professor at Aoyama Gakuin University’s business school in Tokyo.
“It takes time for women to reach executive-officer levels in Japanese bottom-up companies,” said Kitagawa. “We just started to see some women climbing the ladder to the top finally.”
Sumitomo Mitsui’s Kudo is one of them. In her third year at the bank, she took up project finance in the global business division, where she said colleagues returning from overseas helped make her less self-conscious about gender.
Clients remembered her for being outstanding as the only female banker in her team, said Kudo. While she is single and childless, it “just happened” rather than being a choice to put career first, she said.
“You don’t have to give up on being a woman,” said Kudo, who wore a ruffled white blouse under a gray suit. “I want to help my bank build an environment where motivated and talented women can keep working and be fairly evaluated.”