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Nissan Motors Corporate Governance Failure

Solution Id Length Case Author Case Publisher
2168 411 Words (3 Pages) Nisha Kohli, Ajai Gaur Ivey Publishing : W20498
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Nissan's corporate governance was headed by a non-diverse board that comprised of more males – with one-third of the board being appointed but Ghosn himself. This highlights the influence Ghosn had on the board – which would then undermine accountability actions against the CEO by the board. Moreover, the board did not comprise sub-committees.

Following questions are answered in this case study solution:

  1. Outline the corporate governance practices adopted by Nissan? 

  2. List the circumstances that enable Ghosn to transgress. 

  3. How might a new leadership team and board strengthen governance at Nissan?

Case Study Questions Answers

Ghosn half dull control over staffing decisions, where auditors who voiced against him were not re-elected. Staff and directors also avoided voicing their issues for lack of losing their jobs. Ghosn himself avoided questions and comments which put him in an uncomfortable spot. The internal controls were weak because of the poor corporate governance – with no check and balance measures and tools for the CEO. 

2. List the circumstances that enable Ghosn to transgress. 

A number of different factors led to Ghosn transgressing. Firstly, the alliance formed between Renault, Nissan, and Mitsubishi allowed the three companies to act individually, but at the same time, act as a global grouping. Carlos Ghosn was Chairman of both Nissan and Mitsubishi, as well as being chairman and chief executive of Renault – highlighting his power position. Another factor was that Ghosn's has teamed up with Kelly as an ally – Head of Human Resources, and conducted a number of confidential purchases and transactions for Ghosn under company pretext.

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