YOKOHAMA, Japan – Nissan shareholders approved sweeping reforms to improve corporate governance at the automaker following last year’s arrest and ouster of former chairman Carlos Ghosn, while embattled CEO Hiroto Saikawa signaled he was preparing to step aside.
Saikawa, saying it was his intention to take responsibility for the scandal, said that implementing the structural overhaul marked an important “personal” milestone. He said his focus would now turn to developing a next-generation leadership to take the helm of the company.
“I am reaching a big milestone personally in terms of fulfilling my responsibility,” Saikawa said during the Japanese automaker’s June 25 annual shareholders’ meeting at a convention center here not far from its global headquarters. “We need to think about the future of the company and succession plan, preparation for that, and be ready for the next step… In order to fulfill my remaining responsibilities, I would like to focus on and prepare the successors.”
Added Saikawa: “That is another imminent challenge.”
Saikawa wins reforms at Nissan; signals hand over of power
Nissan shareholders approved Saikawa’s reappointment to the board, despite growing controversy about his oversight during the time of Carlos Ghosn’s alleged misdeeds.
The reforms ratified by shareholders were in motion for months and are a top Saikawa priority. They create a new board with a majority of independent directors. They also create separate committees overseeing executive nomination, executive remuneration and corporate auditing.
The new structure is supposed to improve accountability and transparency, while helping prevent the kind of concentration of power critics say occurred at Nissan during Ghosn's tenure.
Ghosn’s arrest and allegations of financial misdeeds have plunged the 20-year alliance between Nissan and Renault into chaos. Nissan has leveraged the crisis to push for greater independence and control over its own affairs, while Renault -- the Japanese carmaker’s biggest shareholder with a controlling 43 percent stake -- tries to push ahead with its vision of greater integration.
During the question-and-answer period, some of the 2,800 shareholders at the three-hour, 22-minute gathering asked why Saikawa and other executives were unable to spot the alleged misconduct. One shareholder said Saikawa, as a top Ghosn lieutenant during the period, should resign.
But Nissan shareholders nevertheless approved Saikawa’s reappointment to the board, despite growing controversy about his oversight during the time of Ghosn’s alleged misdeeds.
Indeed, Saikawa will stay on as CEO following approval when the new board meets after the shareholders’ gathering. Saikawa had earlier said he would take a 50 percent pay cut for the current fiscal year ending March 31, 2020, to partly atone for the scandal.
That cuts his annual paycheck to 200 million yen ($1.86 million), Saikawa said.
Improving corporate governance at Nissan was a signature priority of Saikawa.
With that complete, he said he wants to work with the newly created nomination committee to begin selecting a successor. He said he couldn't give a timeline but wanted it prioritized.
“Under the new nomination committee, I personally want the committee to think about not only me but also the next generation of leadership,” Saikawa said. “I want the committee to accelerate preparation so we can hand over to the next generation of leaders.”
Saikawa spent months preparing the overhaul put before shareholders. “Transitioning to three statutory committee is a must-have,” Saikawa said before the vote. “I cannot give up on this.”
At the June 25 meeting, shareholders also approved the appointment of a new outside board member who was expected to be named the next chairman, succeeding Ghosn.
The chairmanship has been vacant since Ghosn’s removal from the post in November.
Filling the role will be Yasushi Kimura, 71, pending board approval. He is an advisor at JXTG Holdings Inc., a leading Japanese oil and gas distributor and metals conglomerate.
Renault Chairman Jean-Dominique Senard will serve as vice chairman.
As part of a compromise with Renault, Nissan will also give Renault more representation in the Japanese company’s new three-pronged committee structure. Senard will sit on the new nomination committee, and Renault CEO Tierry Bollore will be on the audit committee.
Renault had threatened to abstain from voting on Saikawa’s overhaul plan, if its concerns about representation were not addressed. Sitting out would have effectively blocked ratification.
The sparring between the alliance partners came after Nissan reportedly undercut Renault's proposed merger with Fiat Chrysler Automobiles by deciding to abstain from supporting that deal.
Under the new structure, seven of the 11 board members will be outside directors. Renault will be represented by Senard and Bollore, Nissan by Saikawa and COO Yasuhiro Yamauchi.
The governance overhauls were recommendations in the final report of a special committee Saikawa set up in December to examine ways of improving corporate oversight. The panel's said “the primary root cause of the misconduct was the concentration of all authority in Mr. Ghosn.”
The report described the alleged falsification of documents dealing with compensation, and a scenario in which Ghosn supposedly had full freedom to single-handedly decide pay for directors and top executives, including himself. Checks and balances failed, it said, because Ghosn coalesced key administrative authority in a few trusted lieutenants.
“Ghosn made the certain administrative departments which would be able to discover management misconduct opaque by concentrating authority,” the committee wrote.
“The checks and balances functions of the certain departments did not necessarily function effectively with respect to Mr. Ghosn’s demands for his personal gain,” it said.
Ghosn denies all wrongdoing and says he is the victim of a corporate coup by Japanese executives at Nissan who fear losing power through closer integration with Renault. Ghosn defends himself saying that he always acted with the full authority of the Nissan board.
