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Contents
1. Analyse the articles and the issues.......................................................................................................2
A. Summary of the story..........................................................................................................................2
B. The corporate governance issues rose in the Carlos Ghosn Case and its relevance to the corporate
governance practice in Australia and Japan.................................................................................................2
C. Agency theory.....................................................................................................................................4
D. Any other corporate governance theories that help us understand the issues in Carlos Ghosn case.....4
2. Corporate governance systems............................................................................................................5
A. Issues in the corporate governance system of Japan............................................................................5
B. Differences between Australian corporate governance system and the Japanese system.....................6
C. Present recommendations as to how corporate governance systems could be improved in both
Australia and Japan.....................................................................................................................................8
Reference:...................................................................................................................................................9

1. Analyse the articles and the issues
A. Summary of the story
Carlos Ghosn was the Chairman of the alliance between Nissan Motor Corporation, Renault SA
and Mitsubishi Motors Corporation. He made one of the business’s major alliances of Nissan,
Renault and Mitsubishi. In 2018, he was arrested by the police officers in the case of misuse of
the funds of the company and detained in the Tokyo Detention House. The investigating officer
said that in his investigation there is some evidence about the other wrongdoings of Mr Ghosn
which includes the use of the business resources for his personal purposes. Mr Ghosn was
arrested in the November 2018 and released on bail in March 2019 but he was again attested in
April 2019 on the new accusation of underreporting his post- retirement reimbursement and uses
the funds of Nissan for the recovery from personal losses (Collie 2018).
Director Greg Kelly and Carlos Ghosn both were charged for the misconduct with company
resources. Because of the charges made against Kelly and Ghosn both were relieved from the
post of the representative director and chairman of the alliance of Nissan, Renault and
Mitsubishi. Mr Ghosn denied all the charges of business misconduct and as per his statement, the
arrest is illogical and disgraceful (Lewis and Inagaki 2019).
Nissan Motor Corporation released the governance report which contained the intense and
comprehensive shot about the misconduct of Mr Ghosn. So that Governance Committee of
Nissan recommends the abolition of the customary role of the Corporation Chairman and the
establishment of a board of directors with the majority vote. The main argument was in the
corporation was the abolition of the oversight role the Corporation’s Directorate (Nagata 2018).
B. The corporate governance issues rose in the Carlos Ghosn Case and its relevance to
the corporate governance practice in Australia and Japan.

Allegations on Mr Ghosn rose because the industries offer an excess power of the valued
corporate governance to the chairman and to the directorate. It is significant to note that Mr
Ghosn as a chairman was the most powerful executive of the world. The internal investigation of
Nissan allegedly exposed three main contentions against Mr Ghosn that he was wrongly
broadcasting his reimbursement over a period of years, used the company’s fund for the personal
purposes and improperly filing expenditure reports. He was doing these legal violations from
several years but he was neither indicated nor sentenced for any legal violation. However the
accusations rising from the internal investigation of Nissan deliver the valuable fodders for
corporate governance treaties (Lewis and Inagaki 2019).
The corporate governance association of Asian’s main concerned key issue about Mr Ghosn case
is that he was doing a legal violation and how is it possible that the board of directors of Nissan
were apparently unaware about it. There may be an internal control and governance issue in
Nissan which was not opened by the board of directors of Nissan. And the governance may be
related to the satisfactory attention to the board that is why the board of Nissan Corporation is
unable to give an answer in relation to the misconduct of Mr Ghosn. As per the investigation
officer, it is important that the board of Nissan must identify the governance issue of the
corporation and look back on the matter on what transpired seriously. It is important to take
immediate actions on these alleged wrongdoings for Nissan corporate governance (Olsen 2018).
In the response off the scandal of Mr Ghosn case, Prime Minister of Japan said that the
companies registered in Japanese can absorb much from Australia regarding the worldwide high
standard of its corporate governance. Australia was graded first by the Asian Corporate
Governance Association in corporate governance practices. Australian registered companies are
composed of specialized, knowledgeable, self-governing and non-supervisory directors who
work in meeting room atmospheres which encourages the healthy argument for the consideration
of all viewpoints and ideas. This methodology depends on the chairman’s governance to take the
conversation or an argument to a conclusion and to preserve the power- sharing of the board.
Japanese companies can absorb this methodology from Australia (Moodie 2018).