At a recent shareholders’ gathering of consumer loan provider Acom Co., an institutional investor from Europe proposed that its “articles of incorporation be revised to have at least one female director.”

Given that all the company’s six directors were men, the investor argued, “allowing women to participate in the decision-making process for business management as board members will more greatly contribute to customers’ long-term interests.”

An economic analyst described the suggestion as “noteworthy,” because it is still rare for stockholders in Japan to demand that individuals with a range of sexual identities be appointed as directors.

However, expressing opposition, Acom’s management contended that “personnel with skills required for directors will be selected regardless of gender and nationality as board member candidates.”

The proposal from the European investor was rejected during the meeting on June 24. But pressure against business operators such as Acom is expected to intensify.

Shareholders are aggressively pressuring corporations to hire female directors, as Japanese companies work with far fewer female executives than their counterparts in Europe and the United States.

Stakeholders prominently referred to the lower female board member ratios of enterprises as problems at general shareholders meetings this year.

Some American and European institutional investors have already included women’s percentages among factors to determine which companies to fund, and a lot of Japanese corporations will likely soon be forced to take countermeasures.

In addition, an increasing number of institutional investors and consulting firms are currently calling for increased women’s involvement in management by executing their voting rights at general shareholders’ meetings.

Asset Management One Co., affiliated with Mizuho Financial Group Inc., decided it will object to presidents’ nominations of so-called TOPIX100 companies, listed on the Tokyo Stock Exchange, when they have no women on their boards.

Starting with general shareholders' meetings this year, the new standards are supposed to cover all the corporations listed on the TSE’s top Prime Market in the future.

Firms offering advice for institutional investors on how to exercise their voting rights are jumping on the bandwagon.

Glass, Lewis & Co., a leading U.S. company of that kind, earlier this year began recommending that shareholders take a stand against representative directors’ selection for businesses with no female board members.

Institutional Shareholder Services Inc. in the United States is likewise planning from next year to advise shareholders to oppose company heads’ nominations for enterprises that assign no director seats to women.

Behind the trend is Japanese companies’ globally low female director percentages.

Data compiled in March this year by Nomura Securities Co. show that women accounted for more than 20 percent of board members in a paltry 72 of Japan’s TOPIX 500 firms, compared with 393 of the top S&P 500 corporations in the United States.

APPROACHES NOT ENOUGH

Regarding gender equality, a Japanese company has made an advanced voluntary proposal.

Cota Co., a hair cosmetics maker and seller in Kyoto Prefecture, suggested appointing Renka Honjo, 42, a transgender individual running a “show pub” nightclub, as an outside board member during a general shareholders’ meeting in June. The plan was approved.

That means women, including Honjo, whose physical gender does not match her gender identity, account for three of the 12 directors of Cota following the session.

Only one woman had previously been among its seven board members. For that reason, stakeholders at recent general meetings peppered the management with questions, such as, “What do you think of the fact that directors on the stage are mainly men, although your business caters to women?”

A Cota representative said the corporation weighed what steps to take and decided to recommend selecting Honjo, because that “will fit the corporation’s purpose of pursuing the beauty and other features typical of women.”

Despite such efforts by Japanese firms, a new problem is emerging as more overseas investors express interest in whether board members are women.

Institutional investors normally check the invitations to general shareholders meetings and financial statements to consider how to exert their voting rights.

But the documents often show only the directors’ names, rendering it difficult for non-Japanese stakeholders to ascertain their genders.

Hidenori Yoshikawa, an official of Daiwa Institute of Research Ltd., said he heard a succession of investors from abroad complain that they cannot count the number of female board members simply by thumbing through disclosed data.

“Companies should proceed with information disclosure in a proper manner, as shareholders put more priority on the number of female directors,” Yoshikawa pointed out.