Engagement Between Outside Directors and Institutional Investors

Nissan’s corporate governance guidelines stipulate that the company conducts constructive dialogue and establishes mutually trustworthy relationships with its shareholders and investors, through the timely and appropriate disclosure of corporate information and continuous communication. As part of this initiative, Nissan held a roundtable with its outside directors for institutional investors.

Roundtable held in March 2021

Participants:25 representatives from 17 institutional investment funds
Participating outside directors:
Yasushi Kimura, Chair of the Board of Directors
Masakazu Toyoda, Chair of Nomination Committee
Keiko Ihara, Chair of Compensation Committee
Motoo Nagai, Chair of Audit Committee
Bernard Delmas
Andrew House
Jenifer Rogers



Please explain the status of improvement in governance and challenges. How do you evaluate the effectiveness of the BOD?

In FY2019, the company transitioned to a three statutory committee structure and the committees established respective policies and principles. In FY2020, each committee is functioning more strategically.
Active discussions are taking place at the BOD and committees with the involvement of diverse members and close communication with executives. The effectiveness of the BOD is ensured.
Currently, the biggest challenge is to deliver the results of Nissan NEXT. The BOD is holding in-depth discussions regarding the performance recovery as well as the mid to long-term strategies.

What are the challenges for the nomination committee? Please share the development plan for the next generation of leaders.

One of the three key challenges for the nomination committee is to develop a succession plan for the future CEO. About a year ago, we began identifying requirements for the future CEO. We are entering the final stages of developing the program and expediting the process to execute the program.
Nissan has next generation leaders with great potential.

How do you evaluate the company's efforts in addressing climate change? What kind of discussions are held at the BOD and how is it monitored by outside directors?

Climate change will become one of the top priorities going forward. Nissan announced to be carbon neutral by 2050 and there are many items to be completed by the 2030s, including electrification and innovation of production technology. Nissan will decide on a strategy to address climate change, while utilizing its strengths in electrification and core competencies.

As an outside director, what do you see are the key challenges for Nissan to get back to a sustainable growth trajectory and enhance corporate value for the long term?

The performance recovery is on track, but it is still insufficient for the long-term sustainability of the company. It is important to increase unit sales to achieve profitable growth. Therefore, it is necessary to consider the value proposition of the company, which needs to be encompassed in the new mid-term plan.

What do you pay attention to as an outside director regarding the three company Alliance and what has been discussed at the BOD?

As an outside director, we represent minority shareholders and protect their interests. Nissan has a policy to eliminate conflicts of interest; the company established a conflicts of interest elimination team to enforce this policy, which is headed by the chair of the audit committee. The Alliance is an important asset, and it is important that the company fully utilize the assets of the Alliance to enhance its corporate value. We will manage from a neutral standpoint by checking for conflicts of interest and monitoring benefits to Nissan’s minority shareholders.

Diversity is important not only at the BOD level but also for executives. How do you view this topic as an outside director?

The CEO/COO are actively involved in diversity and inclusion efforts, but the number of female workers are still small at gemba. Nissan is a leader in diversity and inclusion among Japanese companies. However, we need to discuss this at the BOD level and on the business execution side, including HR, in order to further enhance diversity in Japan.

Roundtable held in September 2020

12 representatives from 12 institutional investment funds (2 sessions with 6 persons)
Participating outside directors:
Yasushi Kimura, Chair of the Board of Directors
Masakazu Toyoda, Chair of Nomination Committee
Keiko Ihara, Chair of Compensation Committee
Motoo Nagai, Chair of Audit Committee

Venue:NISSAN MOTOR CO., LTD. Global Headquarters


What has changed the most before and after the transition to the 3-committee structure?

BOD meetings used to be around 30 minutes but now last approximately 3 to 4 hours and 7 to 8 hours if pre-BOD meetings are included. Discussions have become more active due to the diversity of the board members.

How do you build an organization which can satisfy investors by realizing shareholder returns exceeding the cost of equity?

We will work toward enhancing sustainable profitability through the transition from quantity to quality, selection and concentration and maximizing the Alliance.

How were the outside directors involved in developing the transformation plan?

We discussed the plan not only at the monthly BOD meetings but also at the Independent Directors Committee and extraordinary BOD meetings. We provided our feedback on the plan, which was prepared by the management team, and checked for possible areas of conflicts of interest.

Are there any plans to develop a long-term vision and growth strategy?

We would like to proceed with the development and implementation of a long-term-vision for the next MTP as soon as possible. However, the content is most important. Technology is the key factor for the future corporate value of an automobile company and Nissan has a considerable amount of potential.

Are there any long-term KPIs such as ESG in executive compensation?

There is no specific ESG-related KPI but implementation of the Nissan Way is one of the factors in determining compensation. We designed the scheme to incorporate many factors including performance and the Nissan Way in a balanced manner.