Renault to block Nissan governance changes
10 June 2019
10 June 2019
French carmaker Renault has announced its opposition to proposed governance changes put forward by its alliance partner Nissan.
The proposed governance changes have been proposed by Nissan CEO Hiroto Saikawa, and aim to prevent a repeat of the Carlos Ghosn incident. The reforms would have input three committees overseeing audit, remuneration and executive nominations.
Renault’s specific gripe with the proposed reformation appears to be that it has not had a say in how the restructure will take place. Its specific issue is that the new governance structure will weaken Renault’s influence over the Japanese carmaker.
′We firmly believe that Renault’s rights as 43.4% shareholder of Nissan need to be fully recognized and, at a minimum, one or two directors proposed by Renault should be members of each of the three committees,’ a letter from Renault to Nissan said. ′As currently proposed, this does not seem to be the case.’
The Japanese carmaker is less than pleased to hear of its alliance partner’s opposition to change and this clash signals the continuation of tensions between the two automakers.
′Nissan finds Renault’s new stance on this matter most regrettable, as such a stance runs counter to the company’s efforts to improve its corporate governance,’ the company said in a statement.
Since FCA and Renault’s proposed merger, there has been a degree of tension between the two alliance partners.
It was merely a month ago that Renault suggested a joint board structure with the Japanese carmaker.
The plan would have allowed both carmakers an almost equal number of directors for a new company, in which ordinary shares in both Nissan and Renault would be transferred on a balanced basis. The plan was scrapped due to strong opposition from Nissan CEO Hiroto Saikawa.
Changing governance structures could be an attempt to change Nissan’s fortunes as the company has seen a steady downturn in profit forecasts.
The Japanese carmaker’s sales are 24.8% down year-to-date as it struggles in the wake of the Ghosn scandal. A strengthened partnership with Renault could have been the quick win to signal a turnaround for the Japanese carmaker. However, as things stand, Nissan is set to endure more pain.