Tokenism in gender diversity on board of directors

Kan Nakajima, Yoko Shirasu and Eiji Kodera

Journal of the Japanese and International Economies, 2025, vol. 75, issue C

Abstract: This study examines the existence of tokenism in Japanese companies following the implementation of corporate governance reforms. We focus on the appointment of female outside directors. The existence of tokenism on corporate boards is an important issue for companies worldwide because it deals with gender diversity in the appointment of board members. Following the Abenomics policy of empowering females, Japan introduced “Japan's Corporate Governance Code” (the Code), which included board reforms such as appointing at least two outside directors. Using our sample period after the introduction of the Code, we examine whether tokenism occurs in Japan, a country with low female participation in business. The empirical analysis reveals the occurrence of tokenism at the start of the Code's introduction. Companies appoint two outside directors to meet the formal requirements of the Code. They appoint a male outside director first and a female director later as a token. However, tokenism is not observed when busy female directors with extensive experience are appointed to the board, presumably because they have expertise and skills.

Keywords: Tokenism; In-group bias; Female directors; Corporate governance code (search for similar items in EconPapers)
JEL-codes: G32 G38 J16 L25 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jjieco:v:75:y:2025:i:c:s0889158324000388

DOI: 10.1016/j.jjie.2024.101342

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