Business / Corporate

Choice of new CEO key as Nissan seeks to escape turmoil

JIJI

With Nissan Motor Co. CEO Hiroto Saikawa stepping down on Monday, the focal point will be on whether the automaker can swiftly escape from confusion over corporate governance under a new top management.

Saikawa is slated to resign to take responsibility for revelations that he was receiving excess compensation.

Nissan currently faces myriad issues, including a struggle for alliance leadership with France’s Renault SA — a partner and top shareholder of the Japanese company — and recovering its business performance.

Nissan aims to select Saikawa’s successor by the end of October.

Chief Operating Officer Yasuhiro Yamauchi will act as an interim CEO as the company seeks to minimize the effects of Saikawa’s exit. Saikawa will remain a board director.

Nissan’s consolidated operating profit for the April-June period this year plunged 99 percent from a year earlier. Although Saikawa had stressed that the automaker’s earnings were recovering gradually, the scandal has started to affect its operations, including leading the firm to delay corporate bond issuance.

Many fear that the new compensation scandal, which follows financial misconduct allegations against former Chairman Carlos Ghosn, will lead to a deterioration in Nissan’s company image.

The confusion may work against Nissan in negotiations with Renault over matters including reviewing their capital ties.

“I strongly hope that no new delays emerge in alliance discussions (with Renault),” Mitsubishi Motors Corp. Chairman Osamu Masuko said. Mitsubishi is in a three-way alliance with Nissan and Renault.

Nissan’s nomination committee, made up mainly of outside directors, is currently speeding up the selection of Saikawa’s successor. It plans to interview fewer than 10 candidates.

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