Foxconn considers rotating CEOs in management reshuffle

Foxconn Interconnect Technology

10/04/2024 17:01

By Yimou Lee
       TAIPEI, April 11 (Reuters) - Apple supplier Foxconn is
considering introducing a rotating chief executive system in a
major overhaul of its management structure designed to nurture
future talent, three sources briefed on the matter told Reuters.
    For companies around the world, the rotating chief executive
structure is uncommon, but analysts say it can promote teamwork
and prevent leadership from becoming entrenched, as well as
developing a next generation of talent.
    One of the sources said the plan was a response to repeated
calls by investors to boost corporate governance by separating
the role of chief executive from the chairperson.
    Young Liu has held both roles since 2019 in the 50-year-old
Taiwanese company that is the world's largest contract
electronics manufacturer and a major iPhone assembler.
    Senior Foxconn managers  2317.TW , whose clients also
include Amazon  AMZN.O , have discussed the rotating CEO plan
for several months, the three sources with direct knowledge of
the matter said. They all requested anonymity due to its
sensitivity. 
    Foxconn declined to comment.
    Two of the three sources said one option being considered is
to have four CEOs on a rotating basis of six months at a time.
They said details had not been finalised and were subject to
change.
    All three sources said no final decision had been taken as
the Foxconn management was deliberating on how the proposed
system would work, possible candidates for rotating CEO roles,
their responsibilities and how they would work with Liu.  
    One of the sources said the rotating CEOs would be expected
to oversee Foxconn's six core businesses, which include
smartphones, personal computers and televisions but exclude the
operations of major listed subsidiaries such as Foxconn
Interconnect Technology  6088.HK , FIH Mobile  2038.HK  and
Foxconn Industrial Internet  601138.SS .
    Another of the sources said the change could mark the end of
a "one-man rule" system in Foxconn by establishing a structure
in which managers take turns to oversee Foxconn's operations
that include hundreds of subsidiaries and operations in more
than 20 countries.
    Liu took on the chairman and CEO roles following the
retirement in 2019 of billionaire founder Terry Gou, who founded
the company in 1974 and had both titles during most of his
tenure.
    Chinese technology giant Huawei  HWT.UL  introduced a
rotating CEO system in 2011, whereby three top executives take
turns as acting-CEO for six-month stints. 
    Shares of Foxconn, formally called Hon Hai Precision
Industry Co Ltd, have jumped almost 50% so far this year, partly
in response to an AI boom, compared with a 16% rise in the main
index  .TWII .
    Foxconn in March adopted a more bullish outlook for this
year, saying it expected a significant rise in revenue driven by
demand for artificial intelligence servers.

 (Reporting By Yimou Lee; Editing by Anne Marie Roantree and
Barbara Lewis)
 ((yimou.lee@thomsonreuters.com; +886-2-8729-5122;))