Bernard Delmas and Andrew House
Building the new Nissan
Independent outside directors Bernard Delmas and Andrew House
The first 18 months: Achievements and impressions
Bernard Delmas: Nissan is a different organization than it was when we joined the board. I’m delighted to see the company putting the past executive misconduct issue behind it and being able to focus on its core competencies. It’s exciting to look at the paper and see Nissan featured for new products like the Nissan Ariya.
Before the COVID-19 pandemic, I visited Nissan North America’s headquarters and met many employees.
The brand loyalty for Nissan as well as for its customers made a big impact on me. Succession and talent planning is one area we’re focusing on because I think Nissan has a great future and we’d need to retain and develop talent to support that.
Andrew House: The critical word to sum up the period since we joined the board is “reinvention.” A company has few opportunities to undergo a full reinvention, but that was necessary for Nissan.
You must retain the best of the organization, its DNA and its history, while learning new skills. For Nissan, this means retaining its diversity and global mindset, which sets it apart from other Japan-headquartered organizations. It means retaining Nissan’s commitment to innovation and that will remain the lifeblood of the organization.
But Nissan needed to change fundamentally in terms of culture, organization and management style.
The new Nissan Way and reinvented logo sent strong messages, internally and externally, that there is a new management team and philosophy, but that the best of the organization still remains.
As a member of the Nomination Committee, the selection process of the new management team was a critical achievement. It was fair, transparent and fact-based. It resulted in an excellent management team that can break with the past and take Nissan forward.
The future of governance at Nissan
House: Nissan has a relatively new management team and a board with a majority of independent outside directors for the first time. Management must make the necessary decisions to run the company. The board’s role is to hold management accountable for its commitments on behalf of employees and shareholders.
As this new form of governance is a radical shift from the past, there is still a need to establish “institutionalized governance” within the organization. Any form of governance is a framework and a set of rules. Management must lead by example in order to make those rules fundamental in the way Nissan conducts business.
Delmas: Progress still needs to be made in embracing the three-committee governance structure, but I think the willingness of Nissan’s management is clearly there. It’s a matter of continuing to work things out.
Improving corporate value as an outside voice
Delmas: Independent outside directors bring different perspectives due to our diverse and past experience. Our duty is to represent shareholders, especially minority shareholders, thus, we never ask the same questions as we are from different backgrounds. Personally, I have worked for decades in the automotive industry internationally, particularly in Japan and the rest of Asia, by managing businesses and R&D for Michelin. I have a lot of benchmarks and experiences to draw on. Also, because I’m French, I contribute an European perspective to Nissan, which is global and deals with many different markets and cultures.
House: The best board members are those that can help you see outside your company, culture and industry. This can help you spot new trends, threats and challenges.
I have experience managing organizations in Japan, Europe and Silicon Valley. I actually led a company through a turnaround. That experience helps me understand the challenges Nissan’s management is facing. I also led a business through a tremendous shift in business model, consumer taste, and product distribution. I understand how fast an organization must change to succeed.
Nissan is operating in an environment where the future is more uncertain. The board must not only validate management’s plans but also ensure that those plans are sufficiently flexible to adapt to the shifting environment.
Agility and balance
Delmas: I believe the ongoing pandemic is driving change and accelerate the CASE transformation of Automotive industry. The industry is no longer about only building cars, but also offering new mobility services, connected cars, autonomous cars and so on. Management must be visionary to make key decisions and flexible to change. One task ahead of us in 2021 is to set this post-recovery direction and ensure that Nissan will execute and transform with agility.
House: The companies that succeed in the long term are those that strike appropriate balances. The balance between understanding the potential of the future, threats and challenges, and understanding their core skills and competencies. They must be adaptable while retaining the core skills that make the company great.
The road ahead: Change on the horizon
House: The new generation of consumers has a different relationship and personal attachment with brands. Nissan is in a wonderful spot because it has the heritage of a great brand and exciting products coming down the pipeline to reignite that consumer passion. Building that trust is one of the key strategies for creating a winning brand.
Delmas: People are always key. Nissan needs to have the right talent for the future and make sure they can mature and advance within the company. I have had professional contact with Nissan since 1985 and the employees’ professionalism and motivation has always impressed me. Nurturing and motivating talent is another important key to long-term success. The Compensation Committee has focused largely on executive affairs so far, but the entire management structure is important for success as a company.
Published in March 2021