Pressure from foreign investors has spurred serious moves among Japanese companies to seek out more female board members this year, according to a startup chief that helps firms do just that.

Formerly Japan’s youngest female mayor while in her mid-thirties, Naomi Koshi is now the CEO of OnBoard K.K., which specializes in training potential female board members and connecting them with Japanese corporates.

More companies, especially listed ones, are seeking her help this year because of commitments to foreign investors and peer pressure from others in the same industries, Koshi said.

The scramble came after institutional investors — including Norway’s $1.4 trillion pension fund, the world’s largest asset manager BlackRock and Goldman Sachs Asset Management — set rules to vote against Japanese firms with few or no female board members.

"Some chairmen and CEOs are very afraid,” said Koshi in an interview last week. As an example, she cited how votes for Canon CEO Fujio Mitarai dropped to 50.6% from 75.3% at the company’s March shareholder meeting, after proxy adviser Institutional Shareholder Services recommended a vote against Mitarai over the board’s lack of female directors.

The government also disclosed plans earlier this year to press companies listed on the TSE Prime Market Index to raise their ratio of female executives to at least 30% by 2030. Still, only 3.7% of Prime Market companies have reached that threshold, the Nikkei reported Sunday.

Among different drivers, "investors are the most important because shareholders have the power to change the board,” Koshi said. Domestic institutional investors such as Nomura Asset Management and Daiwa Asset Management have also begun to introduce similar policies of advocating for board diversity, she added.

The world’s third largest economy has sought to bring more women into the workforce to make up for its graying population, but has long struggled to meet its targets on diversity in more positions of influence. It ranked 116 out of 146 countries in last year’s Global Gender Gap Report by the World Economic Forum, far below all of its Group of Seven peers.

The push from investors, the government and the TSE combined has led to women holding 39 more seats on top Japanese boards compared to the previous quarter, an increase to 17% from 15%, according to data compiled by Bloomberg. Yet, the number falls behind the 40% for the Stoxx Europe 600, 33% for S&P 500 firms in the U.S. and 19% for companies on the Hang Seng Index in Hong Kong.

Koshi’s desire to push for change has motivated her throughout her diverse career path.

She started her first job in 2002 as a corporate lawyer at Nishimura & Asahi, the largest law firm in Tokyo, and attended Harvard Law School in 2009. During her secondment to a U.S. law firm, Koshi realized the dire situation of Japan’s gender inequality when a male American colleague said he would take paternity leave for a year.

Koshi decided to run for mayor of her hometown of Otsu, the capital of Shiga Prefecture, in 2012, as she hoped to enable women to continue working even after giving birth. She stepped down after eight years — two terms — after building more than 50 nurseries for over 3,000 children.

However, Koshi realized during her term that women still face problems in companies. "Even with nurseries, they pick up their children late because of long hours,” Koshi said. "As a mayor, I cannot change that issue. But after I stepped down, I wanted to tackle the issues at companies.”

Asked why her company, founded in 2021, focuses on addressing board diversity, the 48-year-old said the board has the power to decide. "Women on boards have the ability to change the whole company; they can fix the pay gap or the working style,” said Koshi, who also serves as an outside director for V-Cube and SoftBank.

OnBoard is now among several firms in Japan that seek to advise firms and help them bring in more female board members, as demand increases.

Despite barriers — such as changing the mindsets of younger women to take on leadership roles, and the lack of pipeline candidates in sectors such as manufacturing — Koshi said she believes that gender diversity is critical in bringing in different perspectives so as to change companies.

"My goal is a state where women can choose what they want,” she said.