Following the decision by Nissan Motor Co.'s board of directors at Thursday's extraordinary meeting to remove Representative Director and Chairman Carlos Ghosn, the company's management will inevitably face the urgent challenge of clarifying the entire picture of misconduct by the charismatic executive and of rebuilding its corporate governance.
The meeting started at the company's headquarters in Yokohama at a little past 4 p.m. and ended around 8:30 p.m. In the wake of the unanimous decision to dismiss Ghosn, a Nissan executive looked relieved. "I initially thought that two directors from France's Renault SA would be absent from the meeting or would oppose" Ghosn's dismissal, the executive said.
At the start of the meeting, directors also confirmed that the partnership with Renault remains unchanged, according to the executive.
Ghosn -- now a suspect -- has visited Japan only about once every two months since 2017, when he handed the position of president over to Hiroto Saikawa -- the current president -- and became chairman.
People within the company openly whispered that his daily income must amount to 100 million yen (885,000 dollars) given the compensation he received.
Since autumn last year, Nissan has been caught up in a scandal over inspections by unqualified inspectors. However, Ghosn never publicly apologized on occasions such as press conferences, having Saikawa bear the entire responsibility of explaining the misconduct.
Representative Director Greg Kelly -- the other suspect -- was also relieved of his post at the board of directors meeting. He controlled the company's key operations including personnel affairs, but has visited Japan just once every few months, participating in regular board of directors meetings mostly through teleconferences from his home in the United States, according to sources.
His lack of discipline was apparent: A rumor spread widely through the company that Kelly was perhaps fishing in Florida.
At Thursday's meeting, the board of directors discussed setting up a third-party committee comprising external directors and experts to straighten up Nissan's corporate governance, which allowed the two suspects to treat the company like their own personal possession.
It is believed the committee will make such proposals as building a system to strengthen the monitoring of company management. Among possible concrete measures is to establish a "compensation committee" for external directors to decide on the amounts board members are remunerated on the basis of their performances.
Nissan is considering holding an extraordinary shareholders' meeting to remove Ghosn and Kelly from their director posts.
A focal issue after the shareholders meeting will be who to select as the new directors -- a decision that requires the consent of Renault, which holds a 43.4 percent stake in Nissan. If Renault opposes Nissan's nominations, the process of selecting new directors could stagnate.
Moreover, the Financial Instruments and Exchange Law includes a "dual liability" provision concerning the falsification of securities reports, making it possible for Nissan to also be punished as a relevant corporation. If so, its current management -- including Saikawa -- would not be able to escape responsibility.
Lack of leadership talent
Two seats on the board of directors have been fixed for a long time: those for Saikawa -- long Ghosn's golden child -- and Toshiyuki Shiga, who served as chief operating officer for years. This has contributed to a view that the company has not succeeded in cultivating personnel capable of joining management.
The new management could suddenly see its leadership power decline, depending on how the current case involving Ghosn and Kelly unfolds.
Read more from The Japan News at https://japannews.yomiuri.co.jp/
