Nissan Reforms Pass, Saikawa Reappointed as CEO
Nissan’s planned corporate governance reforms were teetering on the brink of disaster after alliance partner Renault indicated it might abstain from voting on them. The French automaker’s concerns were varied, focusing primarily on a lack of representation from Europe. But some believed Renault was feeling vengeful after Nissan failed to support a merger proposal with Fiat Chrysler and found the Japanese brand’s push for autonomy unsavory. Fortunately, for Nissan, Renault played ball and the reforms passed.
Hiroto Saikawa will likewise retain his position as CEO, despite previous indications that he would step down and claims that he might be too close to Carlos Ghosn to hold the job. Ultimately, Nissan shareholders voted for his reappointment and he promised to carry them boldly into the future while taking some responsibility for the brand’s recent bout of industrial scandals. However Saikawa’s time with the company may be short lived, as he’s already discussing his replacement.
“I am reaching a big milestone personally in terms of fulfilling my responsibility,” Saikawa said during the Japanese automaker’s annual shareholders’ meeting on June 25th. “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.”
Saikawa called the move “another imminent challenge.”
According to Automotive News, the reappointment did not come without its dissenters. Ghosn’s arrest and allegations of financial misdeeds have truly put a damper on the Renault-Nissan Alliance (which still includes Mitsubishi, FYI) and some have alleged Saikawa used his position in the company to orchestrate a corporate coup that would save his job while simultaneously ousting Ghosn as alliance leader.
Others, less willing to engage in unproven but plausible-sounding theories, have suggested that Saikawa’s previous role as Ghosn’s protégé made him unfit to serve as CEO and felt the automaker should be seeking a clean break. However, most Japanese shareholders seem to support him.
From Automotive News:
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.
In addition to board reforms, which slots in a majority of independent directors, the CEO’s big push was for creating the separate committees tasked with overseeing executive nomination, executive remuneration, and corporate auditing. Collectively, Saikawa claims the units will be able to improve corporate accountability and stop the consolidation of power he claims created the Ghosn scandal.
The next big step will be tapping them to help choose a successor. “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.”
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When the corporate offices are in turmoil, the negative effects ripple down the company. Products in the design board could also suffer. Not the best time to purchase a Nissan.
Was Saikawa really a protege of Ghosn? If you consider the possibility the Japanese plotted to take back control of Nissan, and the curious hardline on Ghosn by the Japanese government, And Saikawa's role in Ghosn's downfall, you might wonder if Saikawa was part of that plan from the beginning.