NEW YORK – At this stage the basic facts surrounding the case against former Nissan Chairman Carlos Ghosn remain unclear. It is too early to decide between the two diametrically opposed narratives that have been offered to date: (1) Ghosn is a greedy autocrat who violated laws and company rules to enrich himself at the expense of the company and its stakeholders, or (2) Nissan management, aided by inadequate protections for the accused under Japanese law and by the Japanese government, undertook a coup d’etat to rid Nissan of Renault’s control. We may ultimately discover that this case contains elements of both narratives.
But there is an underlying implication of the Nissan case that may soon begin to plague a number of rapidly internationalizing Japanese companies: Is Nissan a Japanese company or a global company based in France? In a narrow legal sense Nissan is clearly a Japanese company. It is incorporated in Japan, listed on the Tokyo Stock Exchange, and has a traditional Japanese corporate structure. Nissan must comply with Japanese law and regulations and its own internal rules based on Japanese corporate and securities law. However, a broader corporate governance perspective focusing on Nissan’s ownership structure may lead to a different conclusion. Nissan has a controlling shareholder, with Renault owning over 43 percent of the shares, and there is no other large shareholder. Accordingly, Nissan can also be viewed simply as a subsidiary of a global auto manufacturer that is headquartered in France.