Thread by @davidfickling

Here's a quick thread about the strangest part of last night's palace coup by Nissan CEO Hiroto Saikawa against his boss and mentor, Renault-Nissan-Mitsubishi alliance chairman Carlos Ghosn:

bloomberg.com/opinion/articl…

For me the oddest bit was the description if the internal processes. Essentially, a whistle blower came forward alleging Ghosn and director Greg Kelly were involved in hiding his real pay level, and using company assets for personal use.

The matter is under police investigation so Saikawa didn't give many details, but the way he talked about the processes with internal counsel was ... weird.

The gist was "We asked experts if this may the definition of misconduct and they said it did, so we reported the matter to police and are in the process of firing him."

That sounds like a laudable commitment to accountability and good governance. And that's what's so weird.

While on paper the job of internal counsel is to ensure legal compliance at the company, you only need a passing familiarity of these processes to know that their real job is *avoiding legal liability*.

Legal tangles are bad for companies because they destroy shareholder value.

The job of internal counsel isn't really to ensure no one does anything sketchy, it's to ensure that no sketchy activities result in legal tangles.

But in this case, Saikawa gave the impression that counsel were essentially asked to find if there was sufficient evidence to move against the boss.

The normal question would instead be "How can we minimize and excuse the evidence that's there to protect the boss?"

Think of some comparable cases.

When Apple was caught backdating options for Steve Jobs their general counsel was charged but Jobs himself escaped, with the whole thing treated as a blameless mistake on his part.

sec.gov/news/press/200…

And I don't buy "things are different in Japan".

When Kobe Steel was caught falsifying quality data for metal that went to dozens of customers, it took six months and the conclusion of an exhaustive investigation for CEO Hirota Kawasaki to step down:

bbc.com/news/business-…

Corporate Japan has not wanted for scandals in recent years -- Takata airbags, Toyo tire shock absorbers, testing scandals at pretty much every carmaker, Toshiba, Olympus -- but I've never seen a downfall as draconian as this

That's not to say anything about what Ghosn and Kelly did or didn't do. We just don't know yet. And I suspect what some senior executives get away with all the time would make most of us blench.

But that's the point. Normally they get away with it. In this instance, one of Nissan's three representative directors oversaw an internal investigation that has landed the other two in front of the police for what looks like a relatively minor infraction.

(Oh, and when Elon Musk tweeted out a fictitious "funding secured" takeover offer, Tesla's counsel managed to ensure that he got just a slap on the wrist with no admission of securities fraud: sec.gov/news/press-rel…)

It's really hard to see where things go from here.

It's harder to see them going in a good direction.

Look at the statement from Renault -- hardly going along with Saikawa's accusations, and talk about "defense of Renault's interests in the alliance" inpublic.globenewswire.com/releaseDetails…

As I wrote last night -- this is how civil wars start: bloomberg.com/opinion/articl… (ends)