What similarities & differences does the Nissan Ghosn scandal reveal between the comparative current states of UK & Japanese corporate governance?

IS Britain the new Japan or Japan the new Britain when it comes to corporate governance? I have extensive experience working at board level in both countries so believe our similarities massively outweigh our differences.


Taking as our optic public statements regarding recent arrest of Nissan’s Carlos Ghosn, the situations - from government, shareholder, investor & public perspectives – despite claims and beliefs to contrary, are worryingly alike rather than dis-similar.


Executive board similarities in need of remedy across most UK and Japan businesses include:

Belated voluntary and weak governance codes

Repeated failures of supervision by non-independent non-execs

Culture of marking own homework

Soft and/or rubber-stamping rem coms

Weak auditing and compliance metrics and supervision

Lack of diversity appointments

Shadow governance & reporting structures

Uncritical embrace of faux entrepreneurialism

Absence of formal accreditation for non-execs

Triumph of quarterly reporting & spreadsheets over sustainable growth & strategy

Primarily male & stale

Tin ear to feedback or criticism (whether from staff, customers, whistleblowers or markets)

Weak internal rules

Culture of deference (in both executive suites and media)

Corporate governance apples mostly from the same tree



Executive board differences in need of remedy (or, possibly, iteration?) across most UK and Japan businesses include:

Hugging culture

Underpaying of CEOs and Chairman

Long term incentive plans based on actual stretch goals

Better share option grants & vesting supervision


An easy quick to apply litmus test for almost any scandal is: if the board didn’t know then it doesn’t say much for governance and they should take collective responsibility for the failure. If they do know, they should take collective responsibility for the failure.


If we use the shared Japanese and British language of horseracing - in the UK, our situation is not helped by Theresa May’s Corporate Governance initiatives and Green Paper either failing to come under starter’s orders or falling at the first hurdle. Obviously, siren voices of Stewards’ opposition to almost any mooted but toothless window dressing proposals throws into severe doubt their ability to conduct any effective Stewards enquiry. More corporate governance issues unite Japan & Britain than divide us. There is need for urgent change driven by education and training as well as more robustly enforced legislation.


One further thing that the recent Nissan executive board experience highlights is that when it comes to real differences in our respective corporate governance regimes is that in Japan when the wheels of justice finally leave neutral they appear to have the necessary strength to force executive board compliance. In Japan (alleged) mis-deeds see Ghosn held in jail whereas our recalcitrant execs get some bad press and a few difficult questions in front of a parliamentary sub-committee before getting forced to spend more time cruising on their (real or metaphorical) yacht.


Image credit: All About Japan