HONG KONG (Reuters Breakingviews) - Stepping back from the day-to-day at Nissan Motor is a good start for Carlos Ghosn. The workaholic had been combining four chairmanships and three chief executive roles – far too much for even the most indefatigable boss. Now Ghosn will cede Nissan’s CEO role to company veteran Hiroto Saikawa, who has been warming up as co-CEO since October. That is laudable. Losing a few more titles would be even better.
Ghosn has been juggling plates for years: the turnaround specialist became CEO of Japan’s Nissan in 2001 and French sister company Renault four years later. He now serves as both chairman and CEO of Renault, Nissan and their partnership, the Renault-Nissan Alliance. The addition of Mitsubishi Motors last year stretched him even more thinly: Nissan bailed out its ailing peer after a fuel-economy-testing scandal, taking a 34 percent stake and making Ghosn chairman.
To be fair, there was more logic to this than trying to run unrelated companies, like Jack Dorsey is doing at Twitter and Square. The carmakers are bound by shareholdings and close collaboration: the Franco-Japanese alliance ground out 4.3 billion euros of synergies in 2015.
And Ghosn has done a creditable job in a difficult industry. Total returns to shareholders since June 2001 at Nissan are 102 percent, Datastream shows, slightly trailing Toyota’s 113 percent return, but comfortably ahead of both Honda and the wider Topix index. So this looked like an example of corporate governance that is questionable in principle but somehow works in practice.
Nonetheless, companies usually benefit from a single-job CEO focusing on delivering the group’s objectives who works alongside a separate chairman who can look further ahead. This is especially useful in the automotive industry, a complex sector buffeted by everything from technological upheaval to protectionist threats.
Nor was it ever obvious how the set-up would be sustainable after Ghosn left. Finally an answer is starting to emerge. In time he could also hand over the CEO job at Renault. Further out, he could perhaps even dispense with the chairmanships at some or all of the three carmakers to focus on the alliance. That would be a wise executive decision.
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