Nissan panel to propose bigger role for external directors

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A committee tasked with revamping corporate governance at Nissan Motor Co is expected to recommend on Wednesday a bigger role for external directors in overseeing the Japanese automaker following Carlos Ghosn's arrest and ouster as chairman.

The independent panel will announce the results of its three-month audit of Nissan's governance-related procedures, as the company seeks to draw a line under a near two-decade-long period during which Ghosn wielded outsized influence in his dual roles as its chairman and CEO for much of that time.

To decentralize the power structure at Japan's second-largest automaker, the seven-member committee will likely also suggest that the company establish committees for board member nominations, auditing and for determining executive pay, according to a person familiar with the matter.

It may also recommend splitting the positions of company chairman, a role held by veteran top executives, and chairman of the board, who presides over board meetings, and that the latter position should be held by an external director.

The committee was not immediately reachable for comment, but has previously declined to comment on the matter. It will hold a briefing on Wednesday evening to release the recommendations.

Like executives at many Japanese companies, Ghosn held both chairmanship positions at Nissan, adding to his influence at the automaker.

The logo of Nissan Motor Co. is seen at its showroom behind a traffic sign in Tokyo, Japan, February 12, 2019. /Reuters Photo

Nissan has said that too much power had been concentrated on Ghosn, one of the most feted executives in the global auto industry who orchestrated Nissan's financial recovery in the early 2000s and created the blueprint for the automaking alliance between Nissan and France's Renault SA.

At the time of his arrest in Tokyo in November on financial misconduct allegations, Ghosn held the chairmanship at Nissan, Renault and Mitsubishi Motors Corp, which together form one of the world's biggest automakers, while also serving as Renault CEO.

Ghosn is facing charges related to under-reporting his Nissan salary by around 82 million U.S. dollars over nearly a decade, and for temporarily shifting personal financial losses onto Nissan's books during the global financial crisis.

He denies the charges and has argued that his arrest and ouster from Nissan were orchestrated by executives at the company who were opposed to his plans for closer ties with Renault.

Rebalanced alliance

Nissan, Renault and Mitsubishi Motors are retooling their partnership to create a more equal footing between them. Bound by complex cross-shareholdings, the three companies aim to leverage their combined scale to reduce costs for development, procurement and production.

Earlier this month, the three automakers announced they would create an operating board headed by top executives from each of the companies which would oversee the partnership's operations and governance – a role largely held by Ghosn alone in the past.

The newly appointed chairman of Renault, Jean-Dominique Senard, will serve as head of the alliance but – in a critical sign of the rebalancing – not as company chairman of Nissan, a position which could be left vacant for now, according to people with knowledge of the issue.

Nissan is considering asking ex-Toray Industries chief and Japan Inc heavyweight Sadayuki Sakakibara, who served on the reform committee, to take on the role of chairman of the board at the automaker.

Source(s): Reuters