Apple supplier Foxconn is considering introducing CEOs rotation, a system which could see a major reshuffle of its management structure designed to nurture future talent, as per sources familiar with the source. While the concept of rotating chief executives is relatively uncommon among global companies, analysts suggest it can foster collaboration, prevent leadership from becoming entrenched, and facilitate the development of the next generation of leaders, the report said.
Foxconn CEOs rotation
One of the sources said the plan for Foxconn rotating chief executives was a response to repeated calls by investors to boost corporate governance by separating the role of CEO from the chairperson.
Young Liu has held both roles of chief executive and chairperson since 2019 in Foxconn a 50-year-old Taiwanese company that is the world’s largest contract electronics manufacturer and a major iPhone assembler.
Senior Foxconn managers, whose clients also include Amazon, have discussed the rotating CEO plan for several months as per the sources. They all requested anonymity due to its sensitivity.
Foxconn declined to comment.
Foxconn management reshuffle
Two of the three sources said one option being considered by Foxconn is to have four CEOs on a rotating basis of six months at a time. They said details had not been finalized 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. These businesses include smartphones, personal computers and televisions but exclude the operations of major listed subsidiaries such as Foxconn Interconnect Technology, FIH Mobile and Foxconn Industrial Internet.
End of one-man rule
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 introduced a rotating CEO system in 2011, whereby three top executives take turns as acting-CEO for six-month stints.
Foxconn share price
Foxconn formally called Hon Hai Precision Industry Co Ltd share price were down more than 2% on Thursday morning, compared to a 0.2% fall in the broader market.
Share price of Foxconn have jumped almost 45% so far this year, partly in response to an AI boom, compared with a 16% rise in the main index.
In March, it adopted a more bullish outlook for this year, saying it expected a significant rise in revenue driven by demand for artificial intelligence servers.
