The public accounts of malfeasance-grounded allegations against famed auto executive Carlos Ghosn offer a series of important corporate responsibility lessons for officers and directors of health systems.
As chairman and CEO, Mr. Ghosn was one of the most powerful executives in the world, credited with guiding the success of the complex Nissan-Renault-Mitsubishi international corporate alliance. His downfall arose from an internal Nissan investigation that reportedly uncovered three primary allegations relating to personal malfeasance. It is important to note that as of this writing, Mr. Ghosn has neither been charged with nor convicted of any legal violations.
Mr. Ghosn has been described as a charismatic and forceful leader, celebrated for a highly efficient management style and somewhat larger-than-life nature. Such magnetic CEOs exist in most industries (including health care), albeit of different scales. Indeed, a powerful personality is often necessary to achieve exceptional corporate change and growth.
Yet the concentration of power in the hands of one person, abetted by a disenfranchised or deferential board, can become a breeding ground for executive misconduct. Notably, Nissan executives have admitted that Mr. Ghosn held too much power as chairman. Such circumstances tend to inhibit constructive skepticism and respectful dissent by the board. A confident (but still powerful) leader will embrace a board willing to challenge and disagree.
The overarching governance lesson arising from the Ghosn controversy is the strong endorsement of a basic corporate responsibility principle: as the power and influence of the CEO increases, so also must the attentiveness and engagement of the board in order to assure meaningful director oversight. This applies to all board-CEO relationships, not just to the chair/CEO of a multinational corporate alliance.
Another “Ghosn lesson” is to confirm the vitality of the organization’s internal whistleblower mechanism, for it was an internal complaint that prompted the Nissan board’s investigation. Remember that the concept of the whistleblower and “up the ladder” internal reporting has its roots in Sherron Watkins of Enron, and specific provisions of Sarbanes-Oxley.