TOKYO — Keiko Ihara was a part-time fashion model in college when a chance assignment at a Formula 1 event inspired her to switch gears and race cars.
But there were two strikes against her. First, she was a woman in ultra-patriarchal Japan. And second, she didn’t even have a driver’s license.
Ihara not only overcame those challenges to become one of the world’s top female racers, she is now an influential director on the board of Nissan Motor Co.
And the race at Nissan at this moment is white-knuckled.
As one of Nissan’s independent outsider directors, the motorhead turned corporate bigwig has been a key mover in many of the changes during a turbulent post-Carlos Ghosn era.
Ihara chairs the newly created compensation committee, a flashpoint of reform for the automaker, and was widely reported to be a driving force in pushing out former CEO Hiroto Saikawa.
Ihara also sits on the nomination committee that picks Nissan’s future leaders. And she is an adviser at meetings of the Alliance Operating Board that governs business projects with partners Renault and Mitsubishi.
Ihara acknowledged to Automotive News that Nissan and the alliance have been through tough times since Ghosn’s November 2018 arrest for alleged financial misconduct. But she said the partners are making progress on new midterm business
plans to be released around May and that Nissan is poised for a “revolutionary” change for the better.
“I think we have hit the bottom and now we are moving in the right direction,” Ihara said.
Details of the company’s “new way forward” aren’t ready for release, she said. But one element will be restoring trust through better governance, and another will be a wave of new products, she added.
“Nissan is expected to deliver many attractive automobiles,” Ihara said. “These are all exciting; I tested some of them already.”
Ihara should know. As a pro driver, she has an eye for what’s hot and what’s not.
Over a career spanning two decades, she entered 97 races in 70 countries, competing in everything from the 24 Hours at Le Mans and the World Endurance Championship to Formula Three. She has piloted an open-wheeled Dallara F305, a Lola B12/80 and a Ligier JS P2, to name a few, according to DriverDatabase. And in 2013, Ihara, now 46, was the top-ranked woman in the World Endurance Championship.
Over time, she also became an international advocate for women in motorsports and was a brand ambassador for Nissan and Mazda. Among her duties was wowing journalists with stomach-churning laps up the banked curve of Nissan’s Oppama proving ground in a GT-R.
Ihara seemed like a natural choice when she was appointed to the Nissan board in June 2018 as part of a wider effort across the Japanese industry to improve diversity and corporate governance by adding outside directors.
But then the Ghosn scandal erupted, with accusations that the ex-chairman freely wheeled and dealed tens of millions of dollars, and corporate governance exploded to the forefront.
In response, Nissan undertook a massive overhaul of its corporate structure to improve transparency and accountability by elevating the role of independent directors.
Management oversight was decentralized away from the CEO and split into three statutory committees that deal with compensation, nomination and auditing.
Ihara is symbolic of the new, more accountable Nissan where independents get more clout.
When Ihara joined the board, Nissan had only three independent directors. The other members came from Nissan or Renault, the Japanese carmaker’s top shareholder with a 43.4 percent stake.
With the restructuring approved at the 2019 shareholders meeting, Nissan now has seven independent directors, three of whom are not Japanese. And under the new rules, independent directors must chair the three committees and comprise a majority of the committee seats.
Those changes were dramatic in a country where few big companies have implemented any extra measures of transparency and accountability. Fewer than half of Japan’s top 100 companies have the three-committee structure, notes Zuhair Khan, a corporate governance expert and managing director at Union Bancaire Privee in Tokyo.
“It is something that all companies in Japan, especially the larger ones, should adopt. It is the only structure that ensures proper compliance,” Khan said. “It gives a lot of power to independent directors. But there are relatively few companies that have adopted it.”
Ihara said these changes are essential to reestablishing Nissan’s credibility after the Ghosn scandal.
Nissan previously had no committee oversight of executive compensation. A review done after Ghosn’s arrest found he had sole authority over everyone’s pay, including his own.
“We should avoid the case where only one single top manager can make a decision,” Ihara said. “The next step is to regain the trust of stakeholders based on this solid foundation of governance.
“By the end of the revised midterm plan you will see the improvements.”
Some initially criticized Ihara’s nomination as an attempt to install a pliable poster child of diversity. But Ihara has emerged as a strong, outside voice.
She reportedly played an important role in forcing the resignation of Saikawa last September, following revelations that he received improper payouts under an executive incentive program. At the time, some Saikawa critics saw him as a Ghosn-era holdover and wanted him to step aside.
Ihara declined to comment on that, but she said it is her job to hold management accountable.
“For several years, Nissan has been delivering poor results, and we also faced executive misconduct,” she said bluntly. “So the responsibility of the top management should be pursued.
“That’s another role to be played by the independent directors, and that was part of my role.”
Ihara declined to offer a sneak peek of the midterm plan, but she said CEO Makoto Uchida will offer bold remedies for the problems ailing Nissan.
They are many — from a slow new-product cadence and bloated global production capacity to slumping global sales and frayed relations with Renault.
“We need to build a revolutionary plan, otherwise we cannot survive. That’s what Mr. Uchida told me,” Ihara said. “As independent directors, we cannot accept it if it takes too much time.”
Along with the midterm business plan, Ihara said she would like to see a separate road map, looking out to 2030, that charts a course for restoring corporate trust and brand value.
Ihara cautioned that the COVID-19 pandemic may throw a kink into the planning, or possibly force a rethink later. Nonetheless, the plan is expected to account for the pandemic’s impact, she said. Longer term, she assured, Nissan is plotting a sustainable rebound.
“We have improved the governance structure and finally we are ready to move forward positively, including with the alliance,” Ihara said. “Since I assumed a directorship, this is the first time I’ve seen that we are moving toward the right direction.”