Business | DAVOS SPECIAL 2017

Improved innovation through gender equality

Staff Report

Gender equality is one of the areas that the World Economic Forum strongly emphasizes as the organization, which has been publishing the annual Global Gender Gap Report since 2006, believes that half of the world’s talent — women — should be better integrated into the workforce to boost the world economy.

Companies must not ignore the fact that the promotion of diversity, including gender equality, generates public support and improves the chances of hiring talented people to sharpen their competitive edges against rivals in an ever-changing business landscape.

Some international corporations are racing to reinforce gender-equality human resources management systems, while other corporations struggle to make the changes.

Japan notoriously lags behind other developed countries in this area. According to the WEF’s 2016 Global Gender Gap Report, Japan is ranked 111th out of 144 countries, behind Ethiopia at 109th and Nepal at 110th.

Working under the assumption that the base salary for Japanese men was 100, another survey on gender pay inequality showed the salary level for Japanese women was 72.2 in 2015, according to the Ministry of Labor, Health and Welfare and the Japan Institute for Labor Policy and Training. Japan’s figure is lower than Sweden’s 88, France’s 84.9, the 82.5 seen in the U.S., Britain’s 82.4 and Germany’s 81.1.

However, a Japanese company was recently honored for defying this trend. In November, Philip Morris Japan Ltd. won an award recognizing the Japanese unit of the U.S. tobacco giant as one of the most female-friendly companies in the world.

For its efforts at salary equality between men and women, Philip Morris Japan was awarded Equal-Salary Certification by the Switzerland-based nonprofit organization Foundation Equal-Salary. The company is the first to earn the certification outside Switzerland.

“We are very proud of being the first company outside of Switzerland that won the certification,” said Sachiko Okamoto, a member of Philip Morris Japan’s human resources department.

Philip Morris Japan is just the 19th company certified by the foundation. The 18 other companies, including the WEF, the organizer of the annual meeting of global financial leaders dubbed Davos after the Swiss resort at which it is held, are all based in Switzerland.

To receive the certification, companies must meet various criteria, such as a gender wage gap of less than 5 percent and a management commitment to achieve salary equality. The foundation’s screening process involves analytical methods developed by the University of Geneva.

Foundation Equal-Salary founder and CEO Veronique Goy Veenhuys came to Japan to attend the award ceremony in November. Moving forward, she said the foundation will seek out companies deserving the certificate outside Switzerland, and praised Philip Morris Japan for its accomplishment.

“Not many Japanese companies are very aware of the (equal salary) issue. I’d be honored if our being awarded the certificate triggers movement in other companies,” Okamoto said.

Philip Morris Japan has had a clear policy to determine salaries based on employees’ competency, regardless of their gender, race, family structure or other factors.

“It’s not easy to review the pay scale and implement a new salary system to get the certification,” she said. “We’ve long had a corporate culture of ‘the same salary for the same work.'”

The company’s reason for commitment to gender equality mirrors that of the WEF, to show that gender equality works in favor of the economy.

“The environment changes dramatically in our industry and we need to continuously come up with good and innovative product ideas to survive in the market. Diversity, therefore, is a fundamental factor that contributes to coming up with new ideas,” she said, adding that the success of IQOS smokeless cigarette is also owed mainly to diversity.

The company’s goal in the near future is to increase the ratio of female employees in its sales subsidiaries. The company has been expanding by acquiring tobacco sales companies, most of which have very high male-to-female employee ratios. As a result, about 30 percent of positions in Philip Morris Japan’s back offices — such as accounting, human resources and business planning — are filled by women, while only 6 percent of sales division roles are filled by women.

Okamoto also praised Prime Minister Shinzo Abe for his initiative of promoting female talent in Japan. His administration set targets specifying percentage goals for female executives in companies and other similar targets.

“Many companies have started thinking of how their employees work since then,” she said.

The company also has recently enjoyed another similar honor when it was given an award in the “leader turnout” category, as well as taking fifth place in the category of corporations with 1,000 or more employees in Forbes’ Japan Women Award 2016, on Dec. 19.

The Japan Times also took fifth place in the category of corporations with less than 300 employees, and The Japan Times Managing Editor and Executive Operating Officer Sayuri Daimon won the “leader that makes innovation happen” award in the Japan Women Award 2016.


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