Foxconn considers rotating CEO system in management revamp

Foxconn, a key supplier for tech giant Apple, is considering a major overhaul of its management structure by introducing a rotating chief executive system, Reuters reported citing sources familiar with the matter.

This unusual approach, while rare globally, is believed to promote teamwork, prevent leadership entrenchment, and cultivate a new generation of talent within the company.

The proposed move comes in response to persistent calls from investors to enhance corporate governance by separating the roles of chief executive and chairperson, which have been held by Young Liu since 2019.

Foxconn, a 50-year-old Taiwanese company, stands as the world's largest contract electronics manufacturer and a major assembler of iPhones.

Senior executives at Foxconn, whose client portfolio also includes Amazon, have been discussing the rotating CEO plan for several months.

While no final decisions have been made, two of the sources cited by Reuters revealed that one potential model could involve four CEOs rotating every six months.

Details, including candidate selection, specific responsibilities, and collaboration with Liu, are still under deliberation.

The rotating CEOs would likely oversee Foxconn's six core businesses, including smartphones, personal computers, and televisions.

This role would exclude oversight of major listed subsidiaries like Foxconn Interconnect Technology, FIH Mobile, and Foxconn Industrial Internet.

Transitioning to a rotating CEO system could indicate a departure from Foxconn's longstanding "one-man rule" under Liu, who assumed both chairman and CEO roles following the retirement of the company's billionaire founder, Terry Gou, in 2019.

Gou, who founded Foxconn in 1974, held both titles for most of his tenure.

This management restructuring can be deemed similar to Chinese tech giant Huawei's approach in 2011, where three top executives took turns serving as acting CEO for six-month intervals.

Despite the potential management shake-up, Foxconn's stock has been performing well.

Shares dropped by over 2 per cent on Thursday morning, contrasting with a broader market decline of 0.2 per cent.

However, they have surged nearly 45 per cent this year, driven partly by the AI industry boom, compared to a 16 per cent increase in the main index.

In March, Foxconn said that it was optimistic about its financial prospects for the year, anticipating a strong revenue increase pushed by the growing demand for artificial intelligence servers.

(With inputs from Reuters)