Japanese companies that have more female directors tend to beat their peers in terms of stock market performance, according to an analysis by Bloomberg Intelligence.

Over three and five years, companies ranked in the top 10% for female directorships outperformed the Topix by about 7%, with the consumer goods sector leading the gains, according to a report by Yasutake Homma, BI ESG analyst.

The report indicates there’s potential upside for Japanese stocks if firms endeavor to close the gap with global peers in terms of female representation on boards. Women accounted for 15.5% of director roles at Japan’s largest companies in 2022, compared with 31.3% in the U.S., according to the Organization for Economic Cooperation and Development.

Sony Group raised its proportion of female directors to 33% in the fiscal year from April, 2020, from 15% two years earlier, topping the averages for Topix firms of 7% and 5%, respectively, research by Homma shows.

In the five years from Sept. 30, 2018, Sony shares rose 76% compared with 28% for Topix, and in the three years from Sept. 30, 2020, Sony rose 52% versus 43% for the Topix.

Japan will aim to have women make up at least 30% of directorships at major firms by 2030, according to a draft plan issued by the Gender Equality Bureau that said more diversity can contribute to innovation and growth.

Investors including Sumitomo Mitsui Trust Asset Management and Nomura Asset Management take into account female representation on boards, and vote against board-election proposals if female directors aren’t included.

Still, the positive impact from having more women in leadership roles hasn’t necessarily enhanced compensation for women in line with their contributions. Japan has one of the worst gender pay gaps among nations in the OECD, according to an analysis of 2,800 companies by advisory firm WTW and others.