An independent committee set up by Nissan Motor to it advise on how strengthen corporate governance following the arrest of Carlos Ghosn last November found that the former chairman wielded too much power at the Japanese automaker.
The committee's findings were submitted this week to the board of directors at Nissan Motor which is based in Yokohama.
It concluded "the root cause of the misconduct was the concentration of all authority in Mr Ghosn" and recommended Nissan add more independent outside directors to its board to help improve executive compensation supervision and overall financial auditing.
Seiichiro Nishioka, a former judge and the co-chair of the committee, said "the facts show there were governance problems at Nissan and that checks and balances needed to detect the wrongdoing were missing".
Nissan wants to distance itself from Ghosn's upcoming criminal trial. He is accused of financial misconduct including falsifying financial reports and under-reporting his compensation.
Ghosn had been chairman of Nissan Motor for two decades until he was ousted at a shareholders meeting earlier this year.
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By GlobalDataAs chairman of Renault, he led efforts to save Nissan from bankruptcy in the late 1990s, resulting in the French firm taking a 43.6% stake in the company.
He denies the financial misconduct allegations, claiming the charges brought against him by the current Nissan board are politically motivated – triggered by opposition to Ghosn's plans for a full scale merger between Renault and Nissan.
Nissan plans to abolish the post of chairman under a new management restructuring plan, to give way to two separate positions.
The company also plans to appoint a group of independent directors to monitor executive compensation and oversee director appointments and auditing.