Business / Corporate

Renault welcomes Nissan's decision to grant seats on board committees

Bloomberg

Renault SA has welcomed a decision by partner Nissan Motor Co. to grant the French carmaker a seat on its board committees, signaling an end to a dispute that had poisoned the world’s largest auto alliance.

The accord could help mend relations, which plumbed to new depths after Renault Chairman Jean-Dominique Senard threatened to abstain from voting on a governance plan at Nissan’s annual meeting next week. His demand for more committee representation came shortly after Nissan failed to support a merger between Renault and Fiat Chrysler Automobiles NV.

The Japanese company will give Renault CEO Thierry Bollore a seat on the board’s audit committee and Senard a position on the nomination committee — key positions at the heart of decision making — Nissan said in a statement Friday. Renault now expects to support Nissan’s resolutions during the investor meeting on June 25, people familiar with the matter said, asking not to be identified discussing the negotiations.

“The agreement reached on Renault’s presence in Nissan’s new governance confirms the spirit of dialogue and mutual respect that exists within the alliance,” Renault said in a statement.

Yasushi Kimura, an adviser to oil company JXTG Holdings Inc., will chair the board and Senard will become the vice chair. The nomination committee will be chaired by Masakazu Toyoda, the lead independent outside director.

The concessions from Nissan to allow Renault’s CEO onto the audit committee came with strings attached. The Yokohama-based automaker is placing restrictions on Bollore’s role in areas where the two companies might have a conflict of interest, people familiar with the matter said.

While tensions between the partners have never been higher, both sides have indicated they have little choice but to patch up their two-decade alliance. The partnership has proven to be one of the most successful among automakers, generating €5.7 billion ($6.4 billion) in savings from manufacturing, purchasing and engineering in the 2017 financial year, the companies estimate.

Yet the arrangement has grown increasingly fractious since the November arrest of former leader Carlos Ghosn on accusations of financial misconduct, which he has denied. Nissan’s governance overhaul was largely geared toward improving oversight following the scandal.

In the aftermath, a joint audit by the two companies also found transparency breaches and a lack of adequate financial controls at RNBV, the Amsterdam-based company that managed the alliance. Since then, RNBV has been shrunk, its executives reassigned to their respective companies, and common services — such as communications and legal — appear to be dormant.