Ghosn removed as Nissan Chairman
22 November 2018
22 November 2018
Nissan’s board has decided to remove Carlos Ghosn from his role as chairman and representative director following days of discussions over his misconduct in the role.
The board also decided to remove Greg Kelly, accused as a co-conspirator with Ghosn, from his role as representative director. The Japanese carmaker has said that the decision was unanimous and is effective immediately.
In a statement, the company said: ′The board of directors for Nissan Motor Co., Ltd. met today at the company’s global headquarters in Yokohama. At the beginning of the session, the board acknowledged the significance of the matter and confirmed that the long-standing Alliance partnership with Renault remains unchanged and that the mission is to minimise the potential impact and confusion on the day-to-day cooperation among the Alliance partners.’
Nissan is also planning to study the creation of a special committee to take advice from an independent third party regarding the governance management system and better governance of director pay. An advisory committee will also be established to suggest applicants for the role of chair of the board.
Nissan has accused Ghosn of under-reporting his income over some years, as well as abusing expenses and misusing corporate investment funds. Japanese media say prosecutors suspect Ghosn hid five billion yen (€38.8 million) of income from 2010 to 2014. The income he disclosed to authorities was less than half his actual pay, the reports suggest.
Despite losing representative director status, Ghosn and Kelly are expected to keep their seats as regular directors for the time being, as the company’s shareholders are the final arbiters on whether they lose their positions.
The board will likely recommend that shareholders vote to dismiss Ghosn and Kelly as directors, but the timing of a shareholders’ meeting has not been set. The next regular shareholders’ meeting is not expected to happen until June 2019. Nissan would need an extraordinary meeting before then to remove the pair anytime sooner.
However, when shareholders do meet, it could underline current tensions within the Renault-Nissan-Mitsubishi Alliance. Renault owns a 43.4% stake in the Japanese manufacturer and would be invited to vote on Ghosn and Kelly’s ultimate removal. The French carmaker has stated its position as backing the Brazilian, naming Thierry Bollore as deputy CEO, and stopping short of removing Ghosn altogether.
Nissan may not need to worry about the Renault voting bloc thanks to a stopgap clause in its alliance agreement with the French automaker. When the French Government looked to increase its control over Renault from its current 15% holding, the carmaker agreed to limit its formal control over its Japanese counterpart, agreeing to exercise its voting rights in support of any decision regarding the removal, appointment or compensation of a board member.
Ghosn is currently being detained in Japan as authorities investigate the claims against him.