Japan’s conglomerate investment group, SoftBank Group Corp. (SoftBank) announced on Monday, May 18, 2020, that Jack Ma, the co-founder of Alibaba Group Holding Ltd. (Alibaba), will resign from its board, in the latest departure by a high-profile ally of the group’s CEO, Masayoshi Son. It was reported that the decision of Ma, who also recently retired as Alibaba’s executive chairman in September, was announced as he has shown his interest and wanted to invest more time on philanthropy.
Three New Board Members
SoftBank is likely to expand its existing numbers of the board members up to 13 and has plans to add three new executives to the board at its annual general meeting on June 25. According to sources, the company would consider including the group’s Chief Financial Officer Yoshimoto Goto to be one of the new members.
The group would also propose the appointment of Lip-Bu Tan, CEO of chip design software firm Cadence Design Systems who is also chairman of venture capital firm Walden International, and Yuko Kawamoto, a professor at Waseda Business School as outside directors. Kawamoto will become its only female board member in the group, which included Yasir al-Rumayyan, who heads the Saudi Arabian sovereign wealth fund and Vision Fund’s biggest outside backer.
With this expansion, it would meet demand from activist investor Elliott Management, which has urged SoftBank to improve board diversity and also called for a new subcommittee to oversee the investment process at the $100 billion Vision Fund.
Son’s Management of the Group
With the company is expected to report its third consecutive quarterly operating loss and plunging the group as a whole to a record loss later on Monday, Son’s top-down management style has been under increased scrutiny. However, it seemed that restructuring board members of the company were unlikely to have a significant impact on Son’s managerial outlook.
The Board Director Training Institute of Japan, a non-profit focused on corporate governance training, Nicholas Benes stated, “Who is the voice of reason who can stand up to Son? You probably need more than one.” He added, referring to SoftBank’s soured bet on the office-sharing startup, “I am doubtful that these four outside directors, in a board of 13, will have much effect slowing Son down before the next WeWork deal.”
The departure of Ma was the latest move after the exit of Tadashi Yanai, the founder of Uniqlo parent Fast Retailing, who resigned from the board late last year to focus on his fashion business. Meanwhile, SoftBank has bought back more than 250 billion yen of its shares at the end of April while pledging to sell down or monetize $41 billion of assets to raise cash, with its stake in Alibaba – the portfolio’s most valuable asset.
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