The two-decade-old partnership between Renault SA and Nissan Motor Co. faced a new crisis as Renault signaled it would block Nissan from formally adopting an overhauled governance structure at a June 25 shareholder meeting. Renault, which owns 43.4% of the Japanese firm, conveyed its demand for greater representation on new Nissan committees in a letter from Chairman Jean-Dominique Senard just weeks before the meeting. Nissan responded publicly, calling Renault's demand "most regrettable" because it runs counter to efforts to improve corporate governance.
By abstaining from the governance vote, Renault would effectively block the new system, which requires a two-thirds approval for adoption. This proposed structure, including three committees, was developed after months of deliberation by an outside committee and had previously been supported by Senard. Renault's concern stemmed from perceived under-representation on these new committees, which were being introduced following the arrest of former chairman Carlos Ghosn, who denies financial misconduct charges.
Sources revealed that Renault CEO Thierry Bollore had expressed a desire to sit on new Nissan committees overseeing executive nominations, compensation, and corporate governance auditing. However, a Nissan source indicated this could raise conflict of interest concerns, as it would give Renault a direct say in Nissan's salaries and governance. An outside team appointed by Nissan had recommended forming three committees, suggesting Renault directors could serve on the nominations committee but not on the compensation or audit committees.
Nissan CEO Hiroto Saikawa criticized Renault's stance, noting that the proposed changes had been thoroughly discussed and approved by Nissan's board, including Renault's nominees. This dispute follows a period where Nissan expressed caution about a merger offer from Fiat Chrysler to Renault, which ultimately failed. Both the French and Japanese governments reaffirmed their support for the alliance, despite these internal disagreements. Nissan is facing tumbling profits partly due to costs related to Ghosn's arrest and sales problems in North America.
