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Former Nissan CEO Flees Japan

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Carlos Ghosn, the former CEO of auto-maker Nissan, fled Japan last week. He presently resides in Lebanon, dodging the Japanese justice system he says charges him with false crimes.

Ghosn became CEO of Nissan in 2001. After engineering an alliance between three automotive manufacturers, Renault, Nissan, and Mitsubishi, Ghosn shifted focus to Nissan. Since Renault owned 40% of Nissan, Ghosn could leverage his power there to obtain Nissan’s top spot.

Ghosn’s tenure as Nissan’s CEO saw the company flourish. His cost-cutting techniques that saved Renault proved fruitful for the Japanese company’s bottom line. However, his brash style disgruntled the board of his new corporate home. Slashing jobs while taking home a salary far exceeding the Japanese CEO average placed Ghosn at odds with the established leadership. In 2017, Ghosn took home $9.7 million. The average Japanese CEO takes home about $1.44 million.

Cultural friction reached a boiling point in 2018 when authorities arrest Ghosn. His charges consisted of financial misconduct.

Ghosn posted bail last week, then fled to Lebanon.

Nissan Debacle Spells Branding Issue for Japan

Speaking with CNN Business, Jeffrey Kingston, director of Asian Studies at Temple University Japan, suggested the conflict damages Japan’s image. The question of Ghosn’s guilt remains unanswered, but Japan’s conduct ensures, “that has all been overshadowed,” according to Kingston.

Japan’s history with foreign CEOs prominently features cultural friction. Olympus brought on Michael Woodruff in 2011. His time with the company ended abruptly after discovering fraudulent practices. Howard Stringer’s time as Sony’s CEO saw decreased earnings. Craig Naylor resigned from Nippon Sheet Glass citing major differences with the company’s policies.

The controversy with Ghosn will likely further tarnish the relationship between Japanese corporations and foreign CEOs.

Japanese companies will think twice before enlisting a foreigner to lead them. Between the cultural frictions, historically bad track record, and fears of criminal prosecution, both Japanese companies and foreign candidates face hefty obstacles to work together.

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