Just recently, Carlos Ghosn, CEO of Nissan, was arrested and charged with “falsifying financial reports in under-reporting his compensation, and with breach of trust in having Nissan shoulder investment losses and making payments to a Saudi business,” according to AP News. He was released on bail, only to be arrested again just a few days ago. His prospects are looking dim, as the French government is currently ignoring his pleas for help. This scandal has shaken Japan and its booming auto industry, making some fear for a downfall of one of Japan’s biggest auto companies.
Ghosn was one of the most prominent auto industry CEOs, dominating Nissan and being paid an incredible salary, compared to other Japanese CEOs.
This is certainly not the first or the last economic corporate scandal to occur. However, unlike Ghosn, many walk away unscathed. For example, John Stumpf, ex-CEO of Wells Fargo, was alleged to have been aware of a large amount of fraudulent bank account in 2016. Wells Fargo agreed to pay the hefty fine of $185 million, following Stumpf’s resignation. Apparently, Stumpf was aware of this all the way leading back to 2002, but the board chose not to investigate this fraud until 2015. For nearly 13 years he was able to operate this crime smoothly.
These cases only scratch the surface of CEO scandals involving the mishandling of money. As of right now, there are many CEOs committing fraud that have yet to be investigated. According to PWC’s 2018 Global Economic Crime and Fraud survey, economic crimes committed by senior management have increased from 16 percent in 2016 to 24 percent in 2018. These statistics are based on those who admit these crimes or have been publicly known. Therefore, these numbers may really be higher than what is shown. This 8% increase shows what happens when powerful CEOs who are hungry for more than what they have- economic fraud.
To us, corporate leaders live in a world completely different from us. We buy what they offer, and we rarely even know who runs the companies that we are consumers of. But as what Ghosn has shown us, we have to be aware of what lies below our field of vision.
Photo: Norsk Elbilforening