New Renault Chairman Plans Changes to Post-Ghosn Board

(Bloomberg) -- Renault SA’s new chairman Jean-Dominique Senard is considering replacing at least two board members, according to people familiar with the matter, as he puts his stamp on governance at the French carmaker roiled by the downfall of former boss Carlos Ghosn.

Cherie Blair, a lawyer and the wife of Britain’s former prime minister, probably won’t be asked back for a second four-year term, said the people, who asked not to be identified because the matter isn’t public. Lead independent director Philippe Lagayette, 75, will also leave the board due to his age when his current four-year posting expires in June, they said.

Senard hasn’t made any final decisions and other board members’ mandates could also come under review, the people said. Any board changes need to be ratified by shareholders.

A Renault spokeswoman declined to comment on board plans. Blair, 64, and Lagayette didn’t respond to requests for comment. A spokesman for the French government, Renault’s most powerful shareholder, declined to comment.

Senard, an outsider who was thrust into the chairman’s role in January, wants the board to be less of a rubber-stamp operation than it was under Ghosn, the people said. He’s under pressure to make changes at Renault following Ghosn’s indictment in Japan on alleged financial crimes at alliance partner Nissan Motor Co., where Ghosn was also chairman. New directors could help the board review corporate strategy, while providing Senard fresh viewpoints as he works to strengthen frayed relations with Nissan and third alliance partner Mitsubishi Motors Corp.

New Blood

The search for new blood comes amid an ongoing investigation into Renault’s finances and relationship with outside consultants that could end in the coming days. Ghosn, who remains jailed in Japan, was replaced at the helm only last month, a delay that created friction with Nissan, which pushed the former auto titan out within days of his Nov. 19 arrest. He has denied the charges.

“Renault needs board members and managers who are more critical and who have industrial expertise, rather than yes-men,” said Bruno Jullien, an economist and automotive consultant. “Either they must go, or be put out to pasture.”

Senard has also signaled to his team that the outcome of ongoing financial investigations may lead to departures among the ranks of top management, one of the people said. Anyone who doesn’t come through the probes “ethically” unscathed will have to leave, the person said.

Ongoing Probes

In addition to the Renault probe, a separate audit at Nissan is underway and will be completed by the end of next month, while a joint probe by consultant Mazars of their alliance holding company, RNBV, is set to end before March 15.

Renault’s board includes three members elected by employees, two directors representing the government and two members backed by Nissan, which also has a stake. Senard, who remains Michelin’s CEO through mid-May, has been tasked with strengthening the structure of the 20-year alliance with Nissan and deepening integration between the partners.

Senard is aiming to present proposals for the alliance by this summer, according to one of the people. His moves could be met with suspicion from the Japanese partners, further exacerbating their rocky relationship.

Versailles Parties

The probes have already shone the spotlight on some practices from when Ghosn was at the helm of Renault, Nissan and Mitsubishi. The Renault probe is said to be reviewing the pay of Renault executives including general secretary and former Ghosn lieutenant Mouna Sepehri, as well as celebrations at the Versailles palace outside Paris. The joint Renault-Nissan audit is said to be looking into RNBV’s role in paying for Ghosn and his wife’s invitation to eight couples for an extended weekend at Rio de Janeiro’s Carnival.

At Nissan, Ghosn’s arrest has already resulted in a host of top management changes including the departure of his close confidant, Jose Munoz. Arun Bajaj, head of human resources, is on a leave of absence, while Chief Executive Officer Hiroto Saikawa has said he will “pass the baton” to new leaders as soon as possible after completing governance revisions at the Japanese automaker.

New Style

The French government is pushing Senard to act should the probes uncover evidence of wrongdoing. He is among French bosses who have the ear of President Emmanuel Macron, exchanging text messages with him, according to a person familiar with the matter.

While Thierry Bollore was named CEO of Renault and is charged with day-to-day management of the carmaker, Senard has already signaled a change of style at the top. Unlike Ghosn, he was recently spotted eating with employees at a staff cafeteria and strolling the hallways, according to Franck Daout, a representative of the CFDT union.

Whatever management changes are planned at Renault, “the most important for us is that commitments about business in France are honored,” said Mariette Rih of Force Ouvriere union. “It’s time to exit this economic-political-legal-media soap opera.”

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