Huawei splits CEO role with rotating panel

Chinese telecoms giant founder Ren Zhengfei implements rotation system for CEO role with panel of three executives, in a move to make company more nimble and seen by observers as a succession planning strategy.

Huawei Technologies founder Ren Zhengfei has split the CEO role with a panel of three executives who will rotate at six-month intervals. The move is aimed at making the company more nimble and avoid corporate rigidity, according to a report.

The company's deputy chairman Guo Ping, Xu Zhijun and Hu Houkan will join Ren as co-CEOs, Ross Gan, a Huawei spokesperson told ZDNet Asia in an e-mail. Hu had taken the first rotation as CEO from October through March, while Xu began the second rotation as CEO earlier this month and Guo is scheduled to take the title in October, Gan said, adding that the rotation among the three will continue in that manner.

Ren, however, will retain his title as a deputy chairman of Huawei, and the role of chairwoman Sun Yafang's role will remain unchanged, the company's annual report revealed Monday.

The rotating CEO system will take turns to fulfil CEO duties, compared to one CEO who is expected to handle multiple affairs, have in-depth insight and set the right direction. As such a group of rotating CEOs should be more effective, he noted in the report.

"By authorizing a group of 'bright minds' to act as rotating and acting CEOs, the company allows them to make decisions within certain boundaries while they face a constantly changing world. This is our rotating CEO system," Ren said. "As they seek harmony in diversity, they can help the company adapt quickly to changes in the environment. They make decisions collectively, which avoids corporate rigidity."

The Huawei founder added in the report that a rotating system for leaders was "nothing new", and that companies in traditional industries rotated their CEOs every seven or eight years. However, Huawei had not found a way to adapt well to a rapidly changing society, and time would tell if the rotating CEO system was the right move, he noted.

After their rotational period is over, the non-acting rotating CEOs will still be part of the company's "decision-making" nucleus and will have considerable authority in making business decisions and in deploying managers and experts, Ren said.

"This is succession planning with Chinese characteristics," said David Wolf, CEO of Wolf Group Asia, a Beijing-based marketing consulting firm, in a Bloomberg report. "Ren wants to keep talent. This is [an] excellent way to keep as many tigers in his part of the forest as possible. What would be terrible would be for one of these people to run off."