Alibaba Group has appointed CEO Daniel Zhang to succeed co-founder Jack Ma (pictured) as chairman of the board on 10 September 2019. Zhang has been with Alibaba for 11 years. In the meantime, Ma will continue as executive chairman of the company over the next 12 months to ensure a smooth transition of the chairmanship to Zhang.
Ma will also complete his current term as a member of Alibaba Group’s board of directors until its annual general meeting of shareholders in 2020. Following the succession, Ma will remain a permanent member of the Alibaba Partnership, a 36-member group of core company managers, which has the right to nominate a majority of the directors to the board of the company.
In a letter to shareholders, Aliren and consumers, Ma said, “Since [Zhang] took over as CEO, he has demonstrated his superb talent, business acumen and determined leadership. Under his stewardship, Alibaba has seen consistent and sustainable growth for 13 consecutive quarters.”
He added that plenty of thought has been put into this succession plan, which took 10 years to form. “This transition demonstrates that Alibaba has stepped up to the next level of corporate governance from a company that relies on individuals, to one built on systems of organisational excellence and a culture of talent development,” Ma said.
According to Ma, a “sustainable Alibaba” would have to be built on “sound governance, culture-centric philosophy, and consistency in developing talent”, adding that no company can rely solely on its founders.
“We believed the only way to solve the problem of corporate leadership succession was to develop a system of governance based on a unique culture and mechanisms for developing consistent talent and successors,” his letter read.
He added that the partnerships system Alibaba developed is a “creative solution” to good governance and sustainability, as it overcomes several challenges faced by companies of scale. These include continuous innovation, leadership succession, accountability and cultural continuity. Ma said that over the years, the company has experimented with and improved on the right balance between systems and individuals.
“Simply relying on individuals or blindly following a system will not solve our problems. To achieve long-term sustainable growth, you need the right balance among system, people and culture. I have full confidence that our partnership system and efforts to safeguard our culture will in time win over the love and support from customers, employees and shareholders,” he explained