Shiseido VP aims to elevate more women in Japan's workforce, as women comprise less than 1% of all executives at top 500 Japanese companies compared to 10% in U.S. and U.K., survey finds

TOKYO , November 22, 2011 () – As vice president of Shiseido, Kimie Iwata helps lead one of the biggest cosmetics companies in the world and among Japan's best known brands. She is also a rare female executive in the country, a powerful symbol of both the progress and ongoing struggles of Japanese women in the workplace.

Iwata, 64, has been on the front lines of the fight for gender equality for more than a quarter century. She played an instrumental role in crafting the landmark Equal Employment Opportunity Law in the mid-1980s as a labor ministry bureaucrat. Now at Shiseido Co., she is the driving force behind the company's efforts to foster its female talent and spark broader changes within corporate Japan.

While Japanese women have made significant professional strides over the last 25 years, Iwata is virtually alone in having made it to the top of a major company.

Women's participation in the work force still lags that of men, with most leaving after their first child. They are pushed out by day care shortages and inflexible workplaces, and pulled by social forces that venerate the stay-at-home mom.

The long-standing gender gap suggests a critical role women could play in solving Japan's generational challenge of an aging population and an ever shrinking work force.

A survey this year by the Nikkei financial daily found that women account for less than 1 percent of all executives at the top 500 Japanese companies, compared with more than 10 percent in the U.S. and U.K. The percentage of female managers overall — just over 10 percent — is far behind other advanced economies, according to the government's Gender Equality Bureau.

"If you examine the root of this, it's not ability or desire," Iwata said in an interview with The Associated Press. "It's because during maternity, women leave their jobs, and their careers fall to zero."

If they attempt to return to the work force years later, they encounter a harsh reality. Companies won't hire them as full-time employees. "And as a part-timer or contractor, no matter how hard you work, it's nearly impossible to become a regular employee," said Iwata.

That has left Japan with a big pool of highly educated women either not working or only partially working at a time when it is struggling to overcome two decades of lackluster growth and faces a looming demographic crisis.

With low birthrates and long lifespans, Japan's population of 128 million is projected to shrink by more than a quarter by 2050. The elderly will account for some 40 percent of the country, while the working-age population that's meant to support them contracts, according to government estimates.

Kathy Matsui, chief Japan equity strategist for Goldman Sachs, describes women as Japan's most underutilized asset. She has waged a decade-long professional crusade to push Japan to more fully mobilize its women.

Matsui contends that if Japan's female employment rate — around 60 percent — rises 20 percentage points to match that of males, it would add 8.2 million people to the labor force and boost gross domestic product by as much as 15 percent. And contrary to prevailing opinion, more women working could actually drive birthrates higher.

Empirical evidence shows that countries with relatively high percentages of working women also have robust birth rates. The correlation holds true even within Japan's 47 prefectures: those with greater female labor rates have higher birth rates.

"I'm optimistic because there's no choice," Matsui told the AP. "This country doesn't have any options at all."

Iwata is also hopeful, simply because she's seen just how far Japan has progressed since the early 1970s.

Raised on the western island of Shikoku, Iwata credits her mother for setting her on an extraordinary path for a woman of her generation. She encouraged her daughter to study hard, find a good job and gain financial independence.

After high school, Iwata moved 330 miles away from home to attend the prestigious University of Tokyo. She then moved even further — to Wisconsin's Ripon College for a magical year abroad.

She received a rude awakening after returning to Japan. When Iwata began looking for her first job, she found that no company was hiring women for career-track positions.

Firms instead hired women for menial, dead-end tasks like making tea and copies for men. They were expected to quit at marriage.

With few options, Iwata considered civil service. It turned out the labor ministry was hiring one woman in 1971. She applied and got the job.

"It really wasn't an era where you could build a career," Iwata said. "It was more like there was nowhere else to go."

She stayed for more than three decades, climbing up the ministry's ranks while raising two daughters. It was through the ministry that she came to work intimately on legislation that would become a groundbreaking victory for Japan's working women.

Passed in 1985 and implemented a year later, the Equal Employment Opportunity Law emerged as Japan faced increasing international pressure to address gender discrimination. It prohibited employers from discriminating against women in areas including hiring, promotion, training, job assignment and benefits.

Critics, however, assailed the law for being toothless. It obligated companies to comply but did not mandate sanctions for those that did not.

Still, Iwata said the law served as a key first step.

"Things have changed tremendously in the last 25 years," she said.

Iwata landed at Tokyo-based Shiseido in 2003 upon retiring from government. A high school acquaintance opened the door to the company, which offered her a chance to finally work in the private sector and implement on-the-ground change for both women and men.

The union proved to be an ideal match for both sides.

For the 139-year-old company, there was a growing strategic and social imperative to improve conditions for women. Its business, after all, relies almost entirely on female workers and consumers around the world.

Yet when Iwata started, the vast majority of Shiseido's women were quitting after they gave birth. Women accounted for less than 12 percent of Shiseido's managers — better than the national average but low for a company where females outnumber males four to one.

It decided to step up efforts to keep its women.

Shiseido opened day care facilities at its Tokyo headquarters in autumn 2003. It introduced systems for short-term parental leave and paid nursing care leave for children two years later. In 2006, it launched the "Kangaroo Staff" program, through which part-time workers fill in for Shiseido's beauty consultants needing time to care for children.

Iwata takes pride in Shiseido's new normal.

Now, almost no women quit after childbirth. They take maternity leave, then return, sometimes at reduced hours at first. The ratio of female managers climbed to 20 percent last year.

But she isn't satisfied just yet.

"The goal isn't just to have them return," Iwata said. "We want to develop their careers regardless of gender. We want to have a lot of female managers and executives."

For that to happen, Shiseido needs to make more drastic changes to its corporate culture. Like at other Japanese companies, employees have for decades put in long hours and relied largely on seniority to get ahead.

"If men's work style is the standard, then women, especially with children, will always be second-class employees," Iwata said. "So we need to change how men work."

Shiseido is cutting overtime hours and encouraging men to take paternity leave. The company is also looking to change evaluation systems that currently overlook productivity.

By 2013, the company hopes that 30 percent of its managers will be female.

"I firmly believe that things are heading in the right direction," Iwata said. "I do wish things would change a little bit faster. Change takes a long time in Japan."

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