Motoo Nagai
What is the role of an independent outside director?
After
working
for
around
five
years
as
an
outside
statutory
auditor,
I
was
appointed
to
be
an
independent
outside
director
and
chair
of
the
Audit
Committee
in
June
2019.
My
impression
of
the
current
Board
of
Directors
meetings,
as
compared
to
previous
ones,
is
that
the
agenda
items
are
properly
explained
in
advance
so
that
all
of
the
members
can
proactively
express
their
opinions.
In
serving
as
a
board
member,
I
am
always
conscious
of
the
following
three
points.
First,
the
need
for
management
oversight
from
a
“macro”
perspective
independent
of
and
external
to
the
company.
Like
the
other
board
members,
I
have
executive
experience
at
another
company,
so
I
do
feel
the
urge
to
enter
into
the
realm
of
actually
implementing
measures.
However,
that
would
make
it
impossible
to
separate
such
execution
from
oversight.
At
the
Board
of
Directors
meetings,
I
try
to
represent
the
interests
of
shareholders
and
other
stakeholders,
asking
questions
from
perspectives
that
company
executives
may
not
have
considered
in
order
to
help
them
gain
new
insights.
The
second
point
concerns
restoring
trust.
Trust
can
be
lost
in
a
single
day,
but
restoring
it
can
take
a
very
long
time.
For
Nissan,
restoring
trust
and
reviving
our
business
are
like
the
two
wheels
on
either
end
of
an
axle.
Since
I
am
also
the
chair
of
the
Audit
Committee,
I
want
to
place
a
greater
emphasis
on
restoring
trust.
The
third
and
final
point
is
building
a
relationship
of
trust
with
the
company
executives.
Without
this,
governance
cannot
function
in
the
true
sense
of
the
word.
The
question
I
ask
myself
every
day
is
whether
enough
is
being
done
to
ensure
that
we
respect
the
executives
and
they
respect
us.
Since
I,
in
particular,
am
the
only
full-time
independent
outside
director,
I
make
a
conscious
effort
to
maintain
close
communication
with
company
executives.
Preventing the reoccurrence of misconduct
The
chair
of
the
Audit
Committee
must
play
many
roles,
such
as
preventing
the
reoccurrence
of
misconduct
and
dealing
with
issues
like
conflicts
of
interest
and
trials
related
to
fraud
cases.
I
also
feel
that
our
stakeholders
have
a
strong
interest
in
such
matters.
Through
the
discussions
at
its
Special
Committee
for
Improving
Governance,
Nissan
transitioned
to
a
company
with
three
statutory
committees
(Nomination,
Compensation,
and
Audit),
thereby
renewing
its
system
of
governance.
But
at
this
point
only
the
framework
is
in
place.
One
area
of
concern
for
stakeholders
is
whether
Nissan
will
indeed
be
able
to
prevent
misconducts
from
happening
again.
The
crux
of
a
company
with
three
statutory
committees
is
first
the
evaluation
and
appointment
of
the
CEO,
and
next
compensation.
Because
Nissan
had
a
scandal
related
to
remuneration,
there
is
a
great
deal
of
public
interest
in
this
issue.
A
system
is
now
in
place
to
ensure
transparency
around
remuneration,
and
the
decision-making
authority
has
been
transferred
to
the
Compensation
Committee
so
that
the
sort
of
misconduct
seen
under
the
former
chairman
will
not
reoccur.
In
addition,
a
rule
has
been
introduced
to
the
effect
that,
in
cases
of
compliance
violations
by
executive
officers
and
higher-ranking
officials,
the
response
will
not
involve
company
executives
but
will
be
reported
directly
to
me
as
the
chair
of
the
Audit
Committee.
During
the
discussions
on
how
to
improve
governance,
many
questions
were
raised
regarding
best
practices,
global
standards
and
the
meaning
of
transparency.
Each
of
those
issues
is
important,
but
focusing
only
on
these
issues
risks
making
the
discussion
too
formalistic.
What
is
even
more
important
is
to
be
keenly
aware
of
how
situations
will
be
viewed
by
stakeholders—whether
they
will
be
considered
problematic
in
simple
common-sense
terms—and
to
be
able
to
understand
and
articulate
the
stance
that
Nissan
must
take.
Putting
systems
in
place
is
not
enough.
Nissan
was
criticized
by
the
media
even
after
improving
its
governance.
We
must
correctly
understand
the
situation
Nissan
is
in
and
think
carefully
about
the
views
of
stakeholders.
A
key
task
for
the
Audit
Committee
will
be
to
continue
the
effort
to
hold
the
company’s
former
chairman
responsible
for
his
misconduct
and
fraudulent
activity.
Although
the
criminal
trial
against
the
former
chairman
was
suspended
in
the
wake
of
his
fleeing
Japan,
the
civil
lawsuit
seeking
damages
from
him
is
progressing
steadily,
without
requiring
his
appearance
in
court.
We
filed
a
lawsuit
against
him
in
the
British
Virgin
Islands
in
2019,
as
well
as
a
lawsuit
with
the
Yokohama
District
Court
in
February
of
this
year
seeking
10
billion
yen
in
damages.
The
former
chairman
has
set
up
an
agent
for
the
latter
case,
and
court
proceedings
began
in
November.
Civil
lawsuits
take
time,
but
we
will
advance
steadily
toward
receiving
damages
through
these
judicial
proceedings.
At
the
general
meeting
of
shareholders,
a
question
was
posed
about
whether
the
case
was
closed
when
the
former
chairman
fled
Japan,
but
the
Audit
Committee,
in
cooperation
with
executive
management,
will
continue
its
efforts
to
hold
him
accountable
for
his
misconduct.
The road to improving Nissan’s governance
In
working
with
Nissan,
I
recognized
that
the
company
has
a
rich
array
of
talent
in
the
form
of
outstanding
employees
and
executives.
This
is
why
initiatives
were
driven
by
individuals.
For
example,
if
you
asked
who
was
in
charge
of
this
or
that,
expecting
the
answer
to
be
a
team
or
department,
you
were
instead
told
the
name
of
a
specific
individual.
While
this
approach
may
have
yielded
positive
results,
relying
too
heavily
on
individuals
may
have
resulted
in
the
concentration
of
power
under
the
former
chairman.
For
this
reason,
I
requested
that
job
tasks
be
assigned
to
teams
rather
than
individuals.
In
order
to
truly
strengthen
governance
so
that
it
functions
well,
it
is
necessary
to
enhance
related
teams.
Starting
this
fiscal
year,
our
group
in
charge
of
corporate
planning
and
control
began
to
function.
Additionally,
while
no
department
oversaw
risk
management
in
the
past
and
the
Executive
Committee
(EC)
rarely
took
up
matters
related
to
risk
management,
designating
a
new
team
has
made
it
possible
for
the
EC
and
the
Audit
Committee
to
carry
out
discussions.
A
concerted
effort
is
being
made
within
the
new
framework
to
respond
as
an
organization
to
various
issues
and
advance
initiatives
to
strengthen
governance.
It
does
seem
to
me
that
the
process
of
breathing
life
into
the
new
framework
has
begun.
In
strengthening
governance
for
the
group,
which
is
a
major
theme
this
year,
we
have
been
reviewing
consolidation
under
our
one-year
plan,
including
setting
up
a
task
force
to
decide
which
companies
to
consolidate
and
appointing
a
dedicated
officer
to
manage
group
companies
and
concentrate
business
functions.
The
global
internal
audit
unit
under
my
supervision
is
firmly
monitoring
the
progress
of
governance-strengthening
measures
like
these.
Preparations
have
been
made
to
improve
the
system
and
the
organizational
structures
that
implement
it
are
rapidly
being
improved,
but
the
abnormality
of
the
former
system
means
that
the
company
is
just
arriving
at
the
level
of
a
normal
corporation.
In
other
words,
the
company
went
from
being
in
negative
territory
to
reaching
“zero,”
but
I
believe
that
improved
governance
is
creating
potential
for
Nissan’s
future
advancement.
Published in January 2021