Huawei CEO: My family members working in Huawei will “never enter the successor sequence”

ren zhengfei huawei ceo

According to a recently exposed internal email, Huawei CEO Ren Zhengfei internally stated that all four of his family members working in Huawei will “never enter the successor sequence”.

The following is the full text of the Huawei internal e-mail:

Email symbol [2013] No. 56 issued by: Ren Zhengfei

Summary of the statements in the shareholding-employee congress on March 30, 2013

After the vote over all proposals, CEO Ren expressed his views over the three different problems. Firstly, the rumor about the company’s going public; Second, the problem of succession; third, the relationship with the medias.

1. Clarification of the rumor about the company’s going pubic

There is not only one company development mod, some companies will slowly accumulate the growth. The management of these enterprises are mainly focusing on business management rather than capital management. There have been doubts outside thus I hereby make the clarification. Board of Directors over the past 20 years never studied the issue to go public, because we believe that the going listed is not suitable for our development. The recent speech by Xu Zhijun states the view of the Board of Directors. Xu said: “in the next five to ten years, the company will not consider going public, there is no “going public” as a whole, no “spin-off” to be listed, no consideration by any way of merger, consolidation, acquisition to get access to capital game. We will also will not participate joint venture projects with external capital which may be dragged into capital trap. Over the next five to ten years, the company will focus on administrative reform, the company will change the status of being a centralized company, the responsibility and power will be disseminated allowing people to on the frontline to change the business, service, in order to form a modern enterprise to get adapted to the modern needs.” I fully support this idea, so there is no basis of the rumors about the company going public.

2. The issue of successor

The outside world has long been concerned about this issue, I am responsible for clarifying a few points:

First of all, the company is not mine thus I can’t appoit the successor, but we together have the final say. The outsiders consider me as a god, in fact, this is not the case. Start at the beginning, I regard myself as not capable enough and thus I appointed talented people, if it were not this case, perhaps in the early years the company had already been eliminated. The company is now growing bigger, I will not go back to autocracy and use only those closed to me. The company has a collective leadership, for many achievements, people do not know who achieved them and thus thought that I had achieved them.

Secondly, today the CEO-by-turn system is working well, thus the Chairman of the Board can also be functioning well using the same mode. Huawei’s board of directors are not fully representative of the capital side, but also represent the labor party (Directors must be employees). The success of the previous 25 years means that we have balanced development which is good, thus in the next 20 years we may still find a better balance. In the next three to five years, we will strive to promote administrative reform, after three to five years, we will promote the reform of the governance structure and operation. In case reform is too fast, management could be difficult to be established. Large capital inflows may lead to blind diversification, and thus decreases the speed of development.

Third, four of my families are work in Huawei. I’ve said before, twenty years ago, a person in Lanzhou carrying a small switch, took a train to the counties and areas to promote it, he is my one of my families (more stories telling)…… They are working hard but they are only professional managers, and will never enter the successors of the sequence. I tell you clearly to avoid suspicion, thus save your attention.

Huawei’s successor, besides the talked about vision, character, strong will, but also should have the foresight in term of value evaluation, and the ability to manage the business ecosystem.

Huawei’s successor should have the vision of global market structure, trading, serving the clients, capabilities of execution, deep understanding of new technologies and customer needs, but also has the ability to keep walking.

Huawei’s successor must have end-to-end of the huge number of business flow, logistics, capital flow …… capacity to simplify the management ……

These capabilities are not found in my families, so they will never enter the succession sequence.

3. My relations with the media

For the media, I am almost completely transparent. For more than twenty years, I wrote a number of articles, except only the speech delivered in the European Union, I write all articles on behalf of my heart completely. It does not have to have face-to-face interview which achieves the considered transparency, it is also possible to achieve transparency through literature. These articles are wide open in the company online, or to the external. I think the article is all open, thus it can be considered that I have had an internet with the media. I often concern about the issues shown in the Internet, to solve these problems I actually answer them in my articles.

April 28, 2013

Submitted to the members of the Board, members of the Supervisory Committee

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