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Nissan's Ghosn crisis

Nissan panel to propose leaving chairman post vacant

Full slate of recommendations due out March 27

A Nissan logo displayed at the 89th Geneva International Motor Show in Geneva, Mar.5.   © Reuters

TOKYO -- Nissan Motor will release a set of proposals from its governance reform committee on March 27, including recommending that the Japanese automaker not fill its empty chairman slot.

The Yokohama-based company has blamed a concentration of power in former Chairman Carlos Ghosn for a string of scandals involving his compensation. To separate oversight from management, the special governance reform committee will suggest that the chairman no longer lead board meetings and that the role be entrusted to an outside director.

The proposals urge the establishment of committees for appointments, oversight and compensation to improve transparency in leadership and pay decisions. Each will be headed by an outside director and consist of at least three members.

Independent directors will also make up the majority of Nissan's board. To achieve that, the automaker will have to double the current count of three. The governance reform committee plans to establish requirements for outside directors rather than name them directly.

The panel will also recommend specialized staff for the oversight committee to ensure adequate supervision but will not specify how many people should be hired. The workers will prevent employees from hiding important information from independent auditors under tacit pressure from management.

A review of Nissan's and Renault's capital structure, however, will not be mentioned. Although the committee will reaffirm the alliance's importance, it will not touch on the ratio of their cross-shareholdings or the Restated Alliance Master Agreement, which regulates how the automakers make leadership and business decisions.

Nissan unveiled a new management structure last Tuesday to govern the alliance, which includes Mitsubishi Motors. The committee's proposals will be adopted at a general shareholders meeting in June as the company solidifies its post-Ghosn organization.

The governance reform panel is chaired by lawyer Seiichiro Nishioka and Sadayuki Sakakibari, former president of Toray Industries. The committee consists of four outside experts, including Nishioka and Sakakibara, as well as three independent directors from Nissan, such as former Ministry of Economy, Trade and Industry official Masakazu Toyota and retired Renault employee Jean-Baptiste Duzan.

The committee held its fourth meeting Sunday.

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