Foxconn considers end to ‘one-man rule’, say sources

Taipei — Apple supplier Foxconn is considering introducing a rotating CEO system in a major overhaul of its management structure designed to nurture future talent, sources said.

The rotating CEO structure is uncommon but analysts say it can promote teamwork and prevent leadership from becoming entrenched, as well as developing the next generation of leaders.

Foxconn is the largest Apple supplier and clients include Microsoft, Meta, Google and Amazon. It manufactures a wide range of products including smartphones and wearables.

One of the sources said the plan was a response to repeated calls by investors to boost corporate governance by separating the CEO and chair roles. Foxconn’s global operations encompass 1-million employees across 24 countries and regions. 

Young Liu has held both roles since 2019 in the 50-year-old Taiwanese company, which is the world’s largest contract electronics manufacturer and a major iPhone assembler. 

Sources say senior Foxconn managers have discussed the management overhaul for several months. One option being considered is to have four CEOs on a six-monthly rotating basis but they said the plan was subject to change. 

Foxconn management was apparently deliberating on how the proposed system would work and the relationship with Liu as well as possible candidates. Foxconn declined to comment.

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, FIH Mobile and Foxconn Industrial Internet.

Another of the sources said the change could mark the end of a “one-man rule” system by establishing a structure in which managers take turns to oversee Foxconn’s multiple global operations in more than 20 countries.

Liu, aged 72, took on the chair and CEO roles after the retirement in 2019 of billionaire Terry Gou, who founded the company in 1974 and also held both titles.

Chinese technology giant Huawei 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, dropped more than 2% on Thursday morning. They have jumped almost 45% so far this year, partly in response to the AI boom.

Foxconn in March adopted a more bullish outlook for this year, saying it expected a significant rise in revenue driven by demand for AI servers. 

Reuters