Since taking over as Foxconn chairman in 2019, Young Liu has steered the company through a series of global challenges, including the pandemic, supply chain disruptions, evolving US-China relations, and geopolitical shifts. Under his leadership, Foxconn has emphasized sustainability alongside financial performance, integrating EPS with ESG principles. These decisions are driving the company's ongoing transformation and positioning it for long-term growth.
In an exclusive interview with DIGITIMES, Liu offers a rare glimpse into the thought process behind his leadership decisions, detailing the strategies propelling Foxconn's transformation. He also addresses the pressing challenges facing Taiwan's industrial development and shares his vision for overcoming them.
This article explores Foxconn's corporate governance initiatives and examines the benefits and long-term outlook shaped by its recent policy reforms.
Strengthening corporate governance at Foxconn
Q: How has the rotational CEO program progressed, and what was its initial purpose?
A: The goal is to create a succession model for Taiwanese companies by clearly defining the roles of chairman, CEO, and general manager. The rotational CEO program was designed to separate the responsibilities of the chairman and CEO to enhance governance and accountability.
The primary aim of this separation is to establish a stronger system of checks and balances. It specifically highlights the role of the CEO, as opposed to the traditional general manager position.
In Taiwanese corporate culture, the chairman often doubles as the CEO, creating governance conflicts. This dual role results in the same individual setting goals as chairman and evaluating their execution as CEO, leading to a lack of objective oversight.
The second issue is the misconception that the chairman has a minimal role. In reality, the chairman shoulders significant responsibilities, but when combined with CEO duties, many essential tasks of the chairman are often overlooked.
Traditionally, Taiwanese companies often merge the roles of chairman, general manager, and CEO, creating hurdles during succession planning. The rotational CEO program aims to set a precedent by clearly delineating these roles ahead of leadership transitions.
Separating ownership from management is essential for sustainability. Shareholders take on the chairman role, focusing on strategy and oversight, while professional CEOs handle daily operations to ensure accountability and strategic alignment.
The rotational CEO program embodies this principle by separating goal-setting from execution. This structure strengthens corporate governance and creates a robust system of checks and balances.
Foxconn's rotational CEO system serves as a blueprint, inspiring many subsidiaries to adopt a similar separation of roles between chairman and general manager.
Impact and future vision of the rotational CEO program
Q: How will the rotational CEO program shape Foxconn's leadership and future growth?
A: The program's primary goal is to create a model for specialized leadership roles, providing a strong foundation for future leadership transitions. Historically, business group (BG) general managers have concentrated on their respective units, lacking exposure to the organization's broader scope. This often made direct transitions to group-level leadership challenging and time-intensive.
The rotational CEO program equips BG general managers with early exposure to group-level leadership responsibilities, enabling them to develop the skills required for broader roles. Successful participants emerge as strong contenders for the CEO position. Over time, this transitional system will cultivate a pool of leaders with proven expertise in both operational execution and organizational management.
At Foxconn, we are establishing a robust leadership pipeline through rigorous selection, targeted training, and practical experience. This ensures that every organizational level has a pool of capable successors. The rotational CEO program exemplifies this approach, serving as a benchmark for CEO-level succession planning.
Q: What do you consider the most significant changes at Foxconn since you became chairman in 2019?
A: One of the most impactful changes has been the enforcement of punctuality in meetings, ensuring they start and end on time. This practice has instilled a culture of effective prioritization and improved organizational discipline by encouraging teams to focus on key issues during daily operations.
The second major shift has been the adoption of a systematic, process-driven approach. Instead of celebrating isolated successes, we now focus on refining the strategies that enable them. This methodological emphasis ensures that when opportunities arise, the company is well-positioned to capitalize on them.
The third transformation has been our commitment to ESG principles and enhancing external communication. This shift has significantly elevated employee morale and pride. Where employees once hesitated to associate with Foxconn due to its reputation for rigid management, they now feel a renewed sense of belonging and confidence in the company's progressive image, a sentiment shared by shareholders.
Q: How do you envision Foxconn evolving over the next five years under your strategic blueprint?
A: While Foxconn is recognized as a world-class leader in production and manufacturing, there is room for improvement in achieving top-tier standards in corporate governance.
Our goal for the next five years is to elevate corporate governance to a world-class standard. Starting in late 2023, we made this a core objective, mobilizing every unit within the organization to align with this vision.
DIGITIMES recap: transforming Foxconn's corporate landscape
As chairman, Liu has driven Foxconn's transformation into a benchmark for corporate governance. Initiatives such as the rotational CEO program, streamlined processes, and a focus on ESG have positioned the company as a leader in sustainability and progressive leadership within Taiwan's corporate ecosystem.
Looking ahead, Foxconn is focused on advancing growth strategies, including breakthroughs in AI and electric vehicles (EVs), while tackling broader challenges within Taiwan's industrial landscape. These topics will be discussed in detail in Part II.