Chinese e-commerce giant Alibaba has confirmed Jack Ma’s plan to step down as chairman—He will be replaced by current CEO Daniel Zhang in September next year.
Rumours of the retirement of the 54-year-old Ma surfaced late last week in Chinese business media and were all but confirmed by Ma in an interview with The New York Times. The move failed to shake the company’s stock, as Alibaba is one of the rarer Chinese companies to have made clear succession plans and to have already shared significant responsibilities with professional management. Ma ceased to be CEO in 2013.
Ma, who co-founded the company 19 years ago and has become China’s best-known businessman, will ensure an orderly handover. He will continue on the board of directors until 2020. And he remains a lifetime member of the 36-member Alibaba Partnership, which nominates company directors.
In its less than two decades of existence, Alibaba has transformed many Chinese industries, and helped propel the change from an infrastructure- and export-led Chinese company to one increasingly driven by consumption and services. In recent years, that has led Alibaba to become a major investor in entertainment and media, which it regards both as a source of (future) profits and as a means of enriching and making more sticky its trading platforms.
In a letter to Alibaba’s customers and shareholders, Ma said the 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.”
“Starting the process of passing the Alibaba torch to Daniel and his team is the right decision at the right time, because I know from working with them that they are ready, and I have complete confidence in our next generation of leaders,” Ma wrote. He added that he plans to continue his role as the founding partner in the Alibaba Partnership, which is a group made up of 36 senior leaders entrusted with the company’s mission, vision and values.
“I have put a lot of thought and preparation into this succession plan for ten years. I am delighted to announce the plan today thanks to the support of the Alibaba Partnership and our board of directors. I also want to offer special thanks to all Alibaba colleagues and your families, because your trust, support and our joint enterprise over the past 19 years have prepared us for this day with confidence and strength.
“When Alibaba was founded in 1999, our goal was to build a company that could make China and the world proud and one that could cross three centuries to last 102 years. However, we all knew that no one could stay with the company for 102 years. A sustainable Alibaba would have to be built on sound governance, culture-centric philosophy, and consistency in developing talent. No company can rely solely on its founders. Of all people, I should know that. Because of physical limits on one’s ability and energy, no one can shoulder the responsibilities of chairman and CEO forever.
“We asked ourselves this question 10 years ago – how could Alibaba achieve sustainable growth after Jack Ma leaves the company? 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. For the last 10 years, we kept working on these ingredients.
“Having been trained as a teacher, I feel extremely proud of what I have achieved. Teachers always want their students to exceed them, so the responsible thing to do for me and the company to do is to let younger, more talented people take over in leadership roles so that they inherit our mission “to make it easy to do business anywhere.” Carrying out this mission in order to help small businesses, young people and women around the world is my passion. This is not only our intent from day one but I feel blessed to have this opportunity. To realize the dream behind this mission requires participation by a lot more people than just Jack Ma and persistent effort by generations of Aliren.
“Daniel Zhang, has been with Alibaba Group for 11 years. Since he 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. His analytical mind is unparalleled, he holds dear our mission and vision, he embraces responsibility with passion, and he has the guts to innovate and test creative business models. Deservedly, China’s business news media has named him the No.1 CEO in 2018. For these reasons, he and his team have won the trust and support of customers, employees and shareholders. Starting the process of passing the Alibaba torch to Daniel and his team is the right decision at the right time, because I know from working with them that they are ready, and I have complete confidence in our next generation of leaders.
“As for myself, I still have lots of dreams to pursue. Those who know me know that I do not like to sit idle. I plan on continuing my role as the founding partner in the Alibaba Partnership and contribute to the work of the partnership. I also want to return to education, which excites me with so much blessing because this is what I love to do. The world is big, and I am still young, so I want to try new things – because what if new dreams can be realized?!
The one thing I can promise everyone is this: Alibaba was never about Jack Ma, but Jack Ma will forever belong to Alibaba. He added.
Such a heart touching departure of the well-known billionaire but what can we say! We wish him all the best as he pursue his love for education. We will surely miss him as the chairman of Alibaba.