Hon Hai introduces rotating CEO system

Although the electric vehicle market is getting more competitive, Hon Hai would stick to its goal of seizing a 5 percent share globally, Young Liu said

Hon Hai Precision Industry Co (鴻海精密), a major iPhone assembler and supplier of artificial intelligence (AI) servers powered by Nvidia Corp’s chips, yesterday said it has introduced a rotating chief executive structure as part of the company’s efforts to cultivate future leaders and to enhance corporate governance.

The 50-year-old contract electronics maker reported sizable revenue of NT$6.16 trillion (US$189.67 billion) last year. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), has been under the control of one man almost since its inception.

A rotating CEO system is a rarity among Taiwanese businesses.

Hon Hai has given leaders of the company’s six core business groups the responsibility to oversee all business groups for six months at a time, Hon Hai chairman and CEO Young Liu (劉揚偉) told reporters on the sidelines of the Taipei International Automobile Electronics Show at the Taipei Nangang Exhibition Center’s Hall 1.

“Every company that aims for a sustainable operation would definitely need a succession plan to support that goal,” Liu said. “This CEO rotation arrangement has several benefits. The system helps our future CEOs better prepare for the job and gives them a view of how the company operates.”

Liu, 68, adopted the dual role of Hon Hai chairman and CEO when he succeeded company founder Terry Gou (郭台銘) in 2019.

Such a dual-responsibility role is commonly seen in Taiwanese companies, but it is different from common practices in the US and Europe, where the chairman’s primary role is to lead the board, while the CEO’s job is to manage the company. Foreign fund managers own 40 percent of Hon Hai’s shares.

Hon Hai has divided its businesses into six groups: smartphones, notebook computers, precision components, PCs and displays, TVs and game consoles, and semiconductors.

Commenting on the global electric vehicle industry’s volatility and a price war in China, Liu said Hon Hai would stick to its goal of seizing a 5 percent share of the global market next year.

“As entry barriers ease, more players are joining this game. This is foreseeable. But it is happening sooner than we expected,” Liu said. “We will benefit from this trend, given our new business model.”

Hon Hai seeks to manufacture TVs for other companies on a contract basis, hoping to duplicate its success in providing electronics manufacturing services for Apple and other electronic brands.

Any escalation in the Middle East would have a major impact on the world as it has caused a stock rout on TAIEX on Monday, Liu said.

“The war is not as far as you might think,” he said.