In the recent Financial Times report into the downfall of Carlos Ghosn, head of the Renault-Nissan-Mitsubishi carmaking alliance, one sentence jumped out. Nissan was “a corporate culture in which no one can make any objections or say ‘no’”. People did not criticise Mr Ghosn because they feared retaliation.
These observations came from an internal Nissan governance investigation but they could be said of almost any company. Companies are not democracies. And while each organisation allows a lesser or greater degree of freedom of speech, there are lines that cannot be crossed. Criticising the chief executive is usually one of them.
This raises a problem when it comes to ensuring companies don’t run out of control. Businesses are like families; only those inside them really know what is going on. Outsiders — stock market analysts, investors, the media, even the board — can do their best to find out, but they rarely discover the truth. The employees who do know are tightly constrained. They do not want to lose their jobs or risk their promotion prospects.