Nissan leadership rejig that keeps external directors draws ire

TOKYO: Nissan Motor Co.'s leadership reshuffle has drawn criticism for not going far enough, prompting some to wonder how serious the beleaguered Japanese carmaker is about fixing its finances and securing a partner that would ensure its future stability.

Nissan on Tuesday announced that Chief Executive Officer Makoto Uchida will step down at the end of March and be replaced on April 1 by chief planning officer Ivan Espinosa.

There were a smattering of other executive changes but Nissan kept its entire suite of external independent directors in tact.

That's telling because in the wake of former chairman Carlos Ghosn's ouster in 2018, Nissan rebuilt its leadership with independent directors as a central pillar to improve corporate governance.

Those men and women currently occupy eight seats on the company's 12-member board and have wielded more authority ever since 2019, when Nissan adopted a supervisory committee structure that excluded the CEO and other top executives.

Against that backdrop, the "decision to retain all of the external directors leaves us a little nonplussed," Citigroup Inc. analyst Arifumi Yoshida said.

"With no significant changes being made to the make up of the board, it's unclear whether Nissan will be able to push forward with a management strategy that will convince equity markets."

While Nissan may have a new face at the very top come next month, the automaker still faces a raft of challenges.

In the wake of its failed tie-up with Honda Motor Co., Nissan needs to find another partner to help reverse its fading fortunes.

The company in November announced plans to cut 9,000 jobs and reduce production capacity by 20%, and last month said it now sees operating income for the full fiscal year at ¥120 billion ($812 million), a sizable drop from its previous forecast for ¥150 billion.

Chairman Yasushi Kimura, fronting the media on Tuesday, said that the board "bears responsibility" for Nissan's financial woes.

"Our top priority is to break out of this situation by creating a new leadership" team, he said.

That doesn't appear to have been the case however, said Seiji Sugiura, a senior auto analyst at Tokai Tokyo Intelligence Laboratory Co.

Independent directors must share the blame for Nissan's current position and tardiness in replacing Uchida, whose tenure has been under a cloud for some months.

Since Uchida's appointment in late 2019, all board members have garnered an approval rating of at least 90% during annual shareholder meetings.

That, and particularly investors' perceptions of independent directors, could be set to change in June when the next gathering is due to be held, Bloomberg Intelligence senior auto analyst Tatsuo Yoshida said.

The question will be whether responsibility for the current crisis lies not only with Uchida and other top executives, Yoshida said, but also with those who failed to oversee them properly.