Hiroto Saikawa is coming underneath intensifying strain as chief govt of Nissan as he faces a probably damning appraisal from minority shareholders on the firm’s annual assembly later this month, mentioned individuals near the carmaker.

The evaluation got here as two of the biggest proxy voting companies really useful buyers vote in opposition to Mr Saikawa’s re-election as a director on the assembly on June 25.

Individuals near Nissan mentioned Mr Saikawa was prone to achieve the backing of Renault and its 43 per cent stake for technical causes, however suspect he would lose the help of a majority of the remaining shareholders. One in all these individuals mentioned Mr Saikawa was on “borrowed time” as chief govt.

Proxy voting companies ISS and Glass Lewis primarily based their arguments on Mr Saikawa’s lengthy affiliation with Carlos Ghosn, the previous Nissan chairman who was arrested in November and is awaiting trial in Tokyo on expenses of economic misconduct that he has constantly denied.

To be able to safe his reappointment, Mr Saikawa requires not less than half of voting shareholders at Nissan’s annual shareholders’ assembly to determine in his favour.

The suggestions of proxy voting companies in Japan have taken on a far better resonance following Tokyo’s efforts to foster better consideration on governance by institutional buyers. Asset managers — particularly these with mandates from the Authorities Pension Funding Fund — are underneath better strain to vote their shares and to clarify their selections.

In a letter to buyers this week, Institutional Shareholder Providers (ISS) mentioned that owing to Mr Saikawa’s protracted stint on the Nissan board and since he has lengthy been considered one in every of Mr Ghosn’s closest allies, it could be tough to contemplate him completely unconnected to Mr Ghosn’s alleged wrongdoing.

ISS mentioned Nissan had constructed a company tradition that mirrored Mr Ghosn’s “efficient dictatorship”.

“To be able to break from the previous, the corporate must construct a robust board with recent members. Given the truth that Mr Saikawa has been on the board for 14 years, and labored carefully with Ghosn, Saikawa’s appointment to the board just isn’t thought of acceptable,” the letter mentioned.

The letter famous that Mr Saikawa, who has not been charged by Japanese prosecutors, had signed off on Mr Ghosn’s controversial retirement bundle — only one instance casting doubt over Nissan’s rivalry that Mr Ghosn “is solely incorrect and Nissan is just a sufferer”, ISS mentioned.

In a separate suggestion, Glass Lewis wrote a scathing criticism of Nissan’s poor inside controls and weak danger administration, and mentioned it couldn’t help Mr Saikawa’s reappointment as president as a result of he “ought to have taken better steps in performing its [the company’s] oversight obligations within the misconduct of the board members”.

Nissan declined to touch upon both suggestion.

The calls to vote in opposition to Mr Saikawa’s reappointment come because the Nissan chief is struggling to rescue the Japanese carmaker from years of dismal governance, a top quality management scandal and declining monetary efficiency.

Looming over that, and exacerbated by Fiat Chrysler’s withdrawn merger proposal to Renault, has been Nissan’s deteriorating relationship with its French accomplice.

These tensions threaten to undermine Mr Saikawa’s largest contribution to governance enchancment because the downfall of Mr Ghosn — the deliberate introduction of a three-committee board system. Renault’s chairman, Jean-Dominique Senard, final week instructed Mr Saikawa the French firm would use its stake in Nissan to, in impact, block that overhaul.