Case Study #2

CARLOS GHOSN: HERO OR VILLAIN?

Business Ethics and

Ethical Dilemma

Syndicate Group - 2

Safira Pramewari 29320316

Allendra Pratama 29320323
Saturday, February 20th 2021
Anissa Larasati Nugroho 29320331
Russina Alamsyah 29320332
Eko Frastiawan 29320333
Edwina Chairmanda Afla 29320334
 01 BACKGROUND

THE ALLEGATIONS
02 AND CHARGES AGAINST GHOSN

GHOSN’S DEFENSE
03 AGAINST THE CHARGES

04 ETHICAL ISSUE

05 PROBLEM STATEMENT
CONTENTS
06 CONCLUSION
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BACKGROUND

1.0
 History of The Alliance
1999
Nissan’s share of the Japanese market had
been steadily falling for 26 years and it’s
interest-bearing debt was more than
(US$17 billion at current rates)
Renault purchase 36.8% stake in Nissan 2001-2002
and assigned Goshn
Profit margin improved and Goshn
become CEO.
Renault’s stake at Nissan increased
to 44.4%
2015
The French government enacted the
Florange Act and owned 15% of the
company

2016-2017
Nissan purchased a 34% Mitsubishi,
and Nissan-Mitsubishi BV was
formed.
Ghosn relinquished the Nissan CEO
2019 position to Hiroto Saikawa.
The tripartite alliance produced and sold 10
million cars annually
 Carlos Ghosn’s Journey

Before 1996
Joined Michelin after graduated.
From factory floor became plant
manager and then CEO North
American Division.
It’s acquired Uniroyal Goodrich 1996
Moved to Renault as EVP
“Le Cost Killer”

1999 - 2011
The rehabilitation of Nissan by Goshn
1. Nissan’s Revival Plan: closed
unprofitable plants and terminated
21,000 employees. 2005
2. Nissan 180 plan: achieved one Ghosn was appointed president and CEO of
million sales goal Renault, making him the first CEO to lead
3. Nissan power 88 two Fortune 500 companies.
4. M.O.V.E. 2022 midterm plan
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2.0
THE ALLEGATIONS AND
CHARGES AGAINST
GHOSN

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 THE ALLEGATIONS AND CHARGES AGAINST GHOSN

Arrested in November 19, 2018. Initial allegations stemmed

from the Financial Instruments and Exchange Act Japan, several
allegations as follows:
● Under reported annual income
● Potential case of embezzlement
● Breach of contract
● Ghosn used company resources to fund family vacations
and to finance the purchase, renovation, and maintenance
of homes in Beirut and Rio de Janeiro, which he personally
used.
● The company had paid out consulting fees, supposedly for
the management of charitable activities, amounting to
tens of millions of yen, to Ghosn’s elder sister.
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GHOSN’S DEFENSE
AGAINST THE CHARGES

3.0
 He explained that there was no malice in
1
the transfer of his contracts from his asset
GHOSN’S DEFENSE
management corporation to Nissan.

He claimed Nissan did not incur financial

On January 8, 2019,
Ghosn was given the 2 losses, since the contract was returned to
opportunity to speak the asset management corporation.
publicly before being
brought back to his He averred that all his compensation from
detention cell to await
Nissan was disclosed and that any item
trial. 3 not disclosed referred to hopeful, and not
agreed upon, future payments.

He had entrusted Greg Kelly with the

4 legal management of his compensation,
and though Ghosn maintained he was
abreast of his market rate as a CEO.

He reiterated his love for Nissan and

5 Japan and enumerated all his positive
contributions to both
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ETHICAL ISSUE

4.0
 Global Code of Conduct Nissan:

Comply with all laws and rules Nissan employees will

abide by all laws of the country, and all regulations of
the Company, in which they work.

Ethical Issue The affected parties Consequences

● Damaged corporate image

● Under reported annual income
Stakeholder ● Undermine trust of customer
● Embezzlement
(Investor, employees, customer, Japan and employees
● Breach of contract
Government, relationship between ● Financial and market loss
● Nepotism
France and Japan) ● Fall off relationship between the
● Abuse of power
three companies
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PROBLEM STATEMENT

5.0
 Problem Statement

01
What could Nissan do in its corporate governance structure to restore investor trust
and prevent the recurrence of another Ghosn scandal?

02
What would happen to the alliance between Nissan, Renault, and Mitsubishi?
 1. Organization Restructure
2. Segregation of duty
3. Strengthen GCG Implementation
4. Be Transparent and Accountable

CEO Nissan CEO Mitsubishi CEO Renault

Makoto Uchida Osamu Masuko Luca De Meo

01
1. Alliance continues to benchmark performance in products,
technologies and markets against top industry standards.
2. Focus on the right product, the right market, the right
customer.
3. The current business relationship between the three
02
companies was already considered a leader in the
automotive industry. Therefore, it would be difficult for both
parties if each were to compete separately, since they would
each be competing from weaker positions.
4. The Alliance is a unique strategic and operational
partnership in the automotive world and gives us a strong
edge in the ever-changing global automotive landscape,
said Jean-Dominique Senard, Chairman of the Alliance
Operating Board and Renault. The new business model will
enable the Alliance to bring out the most of each company’s
assets and performing capabilities, while building on their
respective cultures and legacies.
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CONCLUSION

6.0
 CARLOS GHOSN

HERO OR VILLAIN?

Latest update of the case as of 11 January 2020

Before the trial start, Ghosn fled to his childhood home of

Lebanon from Tokyo,

Ghosn is expected to stay in Lebanon for the time being as

a travel ban has been imposed on him by the country’s
prosecutors following an Interpol warrant requested by
Japan over the allegations against him.
Thank
You Syndicate 2
 UN Panel Opinion
“hostage justice”
● detention constituted a breach of
international norms
● prevented him from regaining his
liberty and from enjoying other fair
trial rights, including to freely
communicate with legal counsel
● questioned for several hours a day,
without the presence of a lawyer could
lead to extortion and coercion
● media was skewed against Carlos
Ghosn
● appropriate remedy would be to
accord Mr. Ghosn an enforceable right
to compensation and other
reparations, in accordance with
international law
Japanese government
● filed an objection against the Opinion
adopted by the Working Group on
Arbitrary Detention
● rebuffed accusations of “hostage
justice
● pointed out that defendants are
granted bailーunless “the suspect is
likely to destroy evidence and flee
● legal system prevents the disclosure of
too much information on the criminal
proceedings “in order to protect the
rights of the people concerned.”