YOKOHAMA – Shareholders of embattled Nissan Motor Co. on Tuesday voiced concerns over the fraught relationship with alliance partner Renault SA, while they gave a green light to install a new governance structure to ensure oversight following the arrest of former Chairman Carlos Ghosn.
During a more than three-hour annual shareholders meeting in Yokohama, a number of individual stakeholders expressed distrust toward Renault, as the two automakers have clashed over differences on a proposed merger and Renault’s recent attempt to tie up with Fiat Chrysler Automobiles NV.
“Will you act as a director of Nissan, not as Renault’s chairman?” a shareholder asked Renault Chairman Jean-Dominique Senard, who doubles as a Nissan director.
Senard said he is working “for the well-being of (Nissan)” and has been doing everything he can “to smooth the relationship of the alliance” that he found in a “much worse state” than thought.
Senard explained that the merger between Nissan and Renault is not something he can single-handedly realize because it needs board approval. Renault owns a 43 percent stake in Nissan, while Nissan owns a 15 percent stake in the French automaker.
Renault has reportedly proposed the two firms merge, but Nissan is reluctant out of fear that it will lose its independence.
Nissan CEO Hiroto Saikawa rejected the idea of a merger again during the meeting but stressed that stabilizing the relationship with Renault is essential in order to turn around its struggling earnings. For the business year to March, Nissan is expected to post its lowest earnings in 11 years.
A 72-year-old Yokohama resident who declined to be named said after the meeting that he still cannot fully trust Renault but that it is critical to build a win-win relationship, saying that the ratio of cross-shareholding should be more equal. Saikawa said he will talk to Renault about the shareholding balance if necessary.
As for the failed merger deal with Fiat Chrysler, Senard called it a “lost opportunity.”
“It would have been a wonderful project for Nissan and the alliance because in my mind, it was the only way to enhance and strengthen the alliance in the future,” Senard said.
News of the merger talks between Renault and Fiat Chrysler abruptly emerged last month but they eventually gave up, as Nissan was concerned with the plan.
“All our competitors in the world were very happy” that the deal did not happen, Senard said.
At the meeting, shareholders approved Saikawa to remain CEO, but some criticized him for failing to catch Ghosn’s alleged financial misconduct. Ghosn denies the allegations. Asked when he intends to step down to take responsibility, Saikawa said he hopes that a newly created nomination committee will “speed up” efforts to prepare the next management structure.
Moreover, the annual meeting greenlighted a drastic change to Nissan’s company framework by setting up three key committees tasked with nominations to the board, compensation and auditing. The committees are designed to be more independent from the firm’s internal politics.
Strengthening corporate governance has been a major priority for Nissan, as its problematic structure was exposed following the arrest of Ghosn last November.
It also scrapped the chairman position to avert the concentration of power on a single executive, who could take advantage of it to effectively oversee personnel affairs, which was apparently the case with Ghosn, according to a report by a panel of experts.
But amid increasing tensions with alliance partner Renault, the process to get consensus from the French carmaker did not go smoothly.
Initially, Nissan planned to appoint only Senard as a committee member. However, Renault demanded more representation, saying that it would abstain from voting at the shareholders meeting if their demand was not met. Senard said the French firm was just seeking fair representation .
Eventually, Nissan chose Renault CEO Thierry Bollore to be a member of the auditing committee.