Andy Mukherjee is a Bloomberg Gadfly columnist covering industrial companies and financial services. He previously was a columnist for Reuters Breakingviews. He has also worked for the Straits Times, ET NOW and Bloomberg News.

Toyota got a second chance to do the right thing by women, and blew it.

The first attempt was a non-starter. The high-profile elevation of Julie Hamp, the 78-year-old carmaker's first female executive and only the third woman in the top echelons of the Japanese auto industry, ended in an equally high-profile departure just three months later following Hamp's detention for allegedly importing prescription painkillers without permission. The American was later released, and the police decided not to indict her.

That was last year. President Akio Toyoda announced Wednesday a new round of promotions. And guess what: Come April, 52 of 60 Toyota executives will be Japanese. None will be women.

Japan Inc.'s lack of gender diversity in top corporate jobs is by far the worst in the Group of Seven nations:

Worst of a Bad Bunch
Percentage of listed companies with more than 20% women in management positions*
Source: Bloomberg
*Percentage calculated by only considering companies that report data on women in management

Going beyond the question of fairness, this record has two implications: One, by deciding to run their companies as all-male clubs, Japanese managers are being unfair to shareholders. The average return on equity at companies that say they have less than 10 percent women in management is 6 percent. It's 8.2 percent for companies that have more than 20 percent female representation, according to data compiled by Bloomberg. There's a similar pattern in the U.S. 

More importantly, women in senior corporate positions can be powerful role models for younger women. Having fewer women in offices and factories tends to be a drag on Japan's economic growth, and for all Prime Minister Shinzo Abe's efforts over the past three years to attract women into the workforce, their participation rate is about 50 percent.

In other words, half of Japan's women are out of the workforce, and the gap with men is 20 percentage points. The average difference in participation rates among men and women in the U.S. is just 12 percent.

Salarymen Rule
Women's participation rates are rising, but are still low
Source: Japan Ministry of Internal Affairs and Communications

Women drop out of the labor force in Japan because of an aging society's warped fiscal dynamics: So much of taxpayers' money is spent on supporting the elderly that there isn't enough for young families. Getting the balance right, and freeing up women from unpaid childcare, is the politicians' job. But companies, too, deserve blame for perpetuating a culture in which women who choose to work end up in irregular jobs that offer little security, scant training and virtually no prospect of career advancement.

There were almost three times as many women as men in part-time jobs in 2014, putting in 6 percent more hours for almost 10 percent less pay and a smaller bonus. No wonder, then, that when companies search the ranks of the over-40s, they probably don't find many women ready for C-suite jobs.  

It all boils down to incentives and inspiration. Women in Japan aren't getting enough of the former from their government, while companies like Toyota continue to deny them the latter.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

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Andy Mukherjee in Singapore at

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Paul Sillitoe at