The manager of Norway’s NOK12.5trn (€1.2trn) Government Pension Fund Global (GPFG) has written to Japan’s financial watchdog and stock exchange saying it is still concerned about how few women occupy top corporate roles in the Asian country, but welcomes a proposal that could help.

In a letter to the Japan Financial Services Agency and the Japan Exchange, Norges Bank Investment Management (NBIM) said: “Based on our experience engaging with companies across our portfolio and in Japan, we believe diverse boards tend to be more effective and conducive to the formulation of resilient long-term strategies.”

NBIM’s chief corporate governance officer Carine Smith Ihenacho and senior analyst Séverine Neervoort, who signed the letter, wrote that they noted the increasing number of TSE Prime companies with at least one female director, but said improvements in gender diversity ratios at the executive and management level had not been as widespread.

“We recognise there are many practical difficulties in effecting the system change needed to encourage and maintain a gender-diverse business sector in Japan,” they said in the letter, dated 6 December and published on NBIM’s website today.

“Nonetheless, we remain concerned by the persistent under-representation of women in the higher levels of the management and boards of Japanese companies,” Smith Ihenacho and Neervoort wrote.

In the letter, written in response to an open letter on gender diversity in TSE Prime Market Board in October, from the Asian Corporate Governance Association, of which NBIM is a member, the pair outlined reasons whey diverse boards were better.

They referred to NBIM’s expectation document on human capital management and its position paper on board diversity, which they said provided a foundation for the central bank division’s ownership work and voting decisions on the topic of gender diversity.

“When it comes to company boards, we believe that a broader range of backgrounds and competences is likely to bring different experiences and perspectives on the board, resulting in more informed discussions,” they said.

This, the women said, was likely to improve the quality of the decision-making process.

However, Smith Ihenacho and Neervoort said they welcomed the Japanese FSA’s proposal to require increased reporting on human capital management and on gender diversity.

Although NBIM’s recently-published three-year strategy plan makes no mention of gender, the management operation states its own desire to be a diverse and inclusive organisation.

“The more diverse we are, the broader our perspectives will be, the more creative we become, and the better decisions we make,” NBIM says in its Strategy 25 document.

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