Alibaba Group formally announced the successor for Jack Ma this morning, following erroneous reports over the weekend of him retiring today, which happens to be his 54th birthday as well as the 19th anniversary of Alibaba.
Instead, one year from today, current chief executive officer Daniel Zhang will succeed Ma, while Ma will continue as executive chairman of the company over the next 12 months "to ensure a smooth transition of the chairmanship", according to a press release.
Ma will also complete his current term as a member of Alibaba’s board of directors until its annual general meeting of shareholders in 2020. After that, Ma's lifetime status in the Alibaba Partnership (comprised of 36 partners who are also senior management of Alibaba or its affiliates) means he has a right to nominate future directors to the board of the firm.
In a letter issued by Ma to Alibaba customers, "Aliren" (an endearing term for employees), and shareholders, he said he has "put a lot of thought and preparation into this succession plan for 10 years".
"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 organizational excellence and a culture of talent development," wrote Ma, who wants to return to the field of education.
Ma's communicativeness and salesmanship have forged a personal brand for himself that benefited Alibaba as a whole even after he relinquished his CEO role in 2013. Though Ma was not the CEO on the day the stock symbol BABA went live in 2014, he was still touted as the face of the company.
"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," continued Ma in his letter. "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."
Alibaba has been running smoothly for five years without Ma as CEO due to "institutional ingredients" like its partnership system, "unique" culture and "talented" team, highlighted Ma. He further explained:
The partnership system we developed is a creative solution to good governance and sustainability, as it overcomes several challenges faced by companies of scale: continuous innovation, leadership succession, accountability and cultural continuity. Over the years, in iterating our management model, we have 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.
Since the founding of the company in 1999, we have been of the view that Alibaba’s future will need to depend on “droves of talent” to enable us to iterate on our management succession plans. After years of hard work, today’s Alibaba has a world-class talent pool in quality and quantity. The teacher in me feels extremely proud of our team, our leadership and our unique mission-driven culture, as well as the fact that we continue to develop exceptional business leaders and professional talent like Daniel Zhang.
Daniel 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."