It can be said that a step has been taken forward to maintain the world's second-largest automotive alliance.
France's Renault SA held a board of directors meeting and approved the resignation of Chairman and Chief Executive Officer Carlos Ghosn, who is also Nissan Motor Co.'s former chairman.
Under the new leadership, the roles of chairman and CEO have been separated to decentralize authority. To replace Ghosn, Renault has appointed major French tire maker Michelin's CEO, Jean-Dominique Senard, as chairman and has appointed acting Renault CEO Thierry Bollore as full CEO.
If Ghosn had remained in the top jobs at Renault, the rift in the three-way alliance could have deepened. It is therefore reasonable for the company to revamp its management structure.
Nissan and Mitsubishi Motors Corp. dismissed Ghosn as chairman in November last year. In contrast, Renault, Nissan's largest shareholder with more than 40 percent of its stock, had retained Ghosn, citing "the principle of the presumption of innocence."
However, the likelihood of Ghosn remaining in detention for a protracted period increased. Renault appears to have concluded that if its top leader continues to be absent, its own management and cooperation among the three companies could have been hampered.
Ghosn has been indicted by the special investigation squad of the Tokyo District Public Prosecutors Office on charges such as aggravated breach of trust in violation of the Companies Law.
It has been revealed that Ghosn moved his tax domicile to the Netherlands, where the tax rate is lower, and that has sparked criticism of him also in France. The French government, which is the largest shareholder of Renault, also apparently came to think it would not be able to defend Ghosn to the end.
Governance reform needed
What is important is to steadily improve the relationship between Nissan and Renault.
The French government is said to have informed the Japanese government of its intention to integrate Renault and Nissan. This indicates the French side's strong stance of seeking to maintain its dominant position.
In Nissan, there has been deep-rooted dissatisfaction with the current structure led by Renault, whose business scale is smaller than Nissan's. If the integration is carried out under the current circumstances, Renault's dominance will remain unchanged. It is understandable that Nissan opposes such a move.
Whether Nissan can build a relationship of trust with Senard, who will become the main contact person for the Japanese company, is likely to be the crucial key.
What should be done to enhance the effectiveness of the three-way alliance? Nissan and Renault are urged to negotiate diligently to break their deadlock.
Despite being Renault's largest shareholder, the French government should not excessively interfere with the management strategies of a company in the private sector.
Needless to say, reconstructing corporate governance is a top priority for Nissan. Members of Nissan's expert panel found that the company's internal checks had become dysfunctional due to the concentration of power in Ghosn's hands.
Unless the transparency of its management is enhanced, Nissan will not be able to regain trust. It is hoped that the expert panel will make proposals for workable governance reform.
(From The Yomiuri Shimbun, Jan. 26, 2019)
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