A panel tasked by Nissan Motor Co. to strengthen the major automaker's governance in the wake of the scandal centering on ex-Chairman Carlos Ghosn has called for separation of the execution and supervision of its business, blaming the alleged wrongdoing on the concentration of too much power in the hands of the former charismatic leader. While only Ghosn and a close aide have been criminally charged with offenses such as underreporting his executive pay and aggravated breach of trust, the automaker itself bears the blame for its failure to prevent the misconduct over an extended period. Nissan needs to ensure that the proposed changes to its governance structure will not end in nominal reforms but effectively revamp the way the company is run.

In the report released this week, the seven-member panel, comprising experts such as lawyers and business leaders as well as Nissan's three outside directors, concluded that Ghosn, who led the major Japanese automaker for nearly two decades while also heading the Nissan-Renault-Mitsubishi Motors alliance, allegedly engaged in the suspected offenses — underreporting his pay by billions of yen for years in the company's financial reports and shifting his personal investment losses to the firm — in his pursuit of private gain. The root cause that allowed the alleged wrongdoing to take place for years was the excessive concentration of authority in Ghosn's hands, including on matters of personnel and executive pay decisions, according to the panel, which also blamed the former chairman for allegedly diverting company funds and expenses for private use.

It went on to propose a set of changes to Nissan's governance structure to prevent such a concentration of authority with a single individual, separating the execution of the automaker's business and its supervision — with the president and CEO taking charge of the business execution and chair of the board of directors responsible for supervision of management. The proposed measures include the following: abolishing the post of chairman, which has been vacant since Ghosn was ousted following his arrest in November; the board of directors, which used to be headed by the chairman himself, should now be led by one of the independent, outside directors; and such outside directors should constitute a majority of the board members. Concluding that Ghosn wielded too much power as the top executive of not just Nissan but also of Renault and Mitsubishi Motors, the panel said that Nissan's representative director should not double as a board member of the other group firms.