Nissan shareholders are holding an annual meeting to vote on governance reforms after the Carlos Ghosn scandal (TOSHIFUMI KITAMURA)

Yokohama (Japan) (AFP) – Nissan shareholders on Tuesday approved an overhaul intended to strengthen governance at the crisis-hit Japanese automaker, which is still reeling from the Carlos Ghosn scandal and tensions with French partner Renault.

Shareholders voted in favour of a series of reforms, including the establishment of three new oversight committees responsible for the appointment of senior officials, pay issues and auditing.

They also approved the election of 11 directors as the firm restructures, among them two Renault executives as well as current Nissan CEO Hiroto Saikawa.

The reforms are designed to put Nissan on a more stable footing after the shock caused by former boss Ghosn’s arrest on multiple financial misconduct charges.

Adding to the company’s operational woes, net profit fell to a near-decade low in the last business year and it has already warned of “a difficult business environment” for the next 12 months.

But the reform plan nearly fell apart after Renault, which owns 43 percent of Nissan, complained it did not have enough of a say in the new structure.

Crisis was averted when Nissan suggested Renault chairman Jean-Dominique Senard sit on the appointments committee, and CEO Thierry Bollore on the audit committee.

However, Renault will not be represented on the new committee on pay — possibly reflecting longstanding rancour in Japan over Ghosn’s high compensation compared to most Japanese CEOs.

– Under pressure –

Nissan CEO Saikawa has himself come under pressure, both for the disastrous financial performance of the firm and because the Ghosn protege is seen as a legacy of that era.

He opened the meeting Tuesday at Nissan’s headquarters in Yokohama outside Tokyo by offering his “sincere regrets” over the tumult that has engulfed the firm in recent months.

Saikawa assured shareholders that he would protect the independence of Nissan, which is part of a three-way alliance with Renault and Japan’s Mitsubishi Motors.

Ghosn has accused Nissan executives of seeking to block his plans to more closely integrate the Japanese firm with Renault.

And Saikawa said Tuesday that “autonomy” would remain important for Nissan, while vowing to work with Senard to keep the alliance going in “the most sustainable way”.

He said the current structure of the tie-up could need to be reconsidered “if imbalance becomes a factor of instability”.

The alliance is the world’s biggest-selling auto group, but it has been seriously strained by November’s shock arrest of Ghosn, long considered one of the most astute and powerful executives in the industry.

Since then, Nissan has accused Renault of having too much weight in the group, and of keeping it in the dark over its tie-up plans with Fiat Chrysler (FCA), which collapsed over reservations expressed by the French government.

“Rebuilding a bond of trust is not very easy,” noted Tatsuo Yoshida, an analyst at Sawakami Asset Management.

Senard told the Yokohama meeting that the merger talks with FCA were meant to strengthen Renault’s alliance with Nissan.

“I beg you to believe me on that, there was no aggressive intention towards the company I am the director at,” he said.

Ghosn, who has been sacked from all his roles at the auto firms, is awaiting trial in Japan on charges of under-reporting millions of dollars in salary and of using company funds for personal expenses. 

Ahead of the meeting, 67-year-old shareholder Hideo Yamada said he thought “there will be another round of tensions ahead” between Renault and Nissan, as they struggle to rebuild their relationship.

Kiyoshi Shimizu, 70, said he was “70 percent in favour” of the proposed governance reforms, but “30 percent worried that it may slow the (management) speed”.

“It will be impossible to make quick top-down decisions,” he said.

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.