June 19 – According to Chinese media Baobian, the governance structure of Alibaba Group (BABA.NYSE, 09988.HK) is gradually becoming clearer after the 1+6+N restructuring plan. It is speculated that Daniel Zhang, the highest-ranking executive, may shift his focus to the development of Alibaba Cloud and step down as Chairman and CEO of the group.
Daniel Zhang joined Alibaba in 2007 as the CFO of Taobao.com. When Alibaba went public in 2014, the company began exploring more effective governance models. As one of the few diversified management talents at Alibaba, Daniel Zhang was appointed as the CEO of Alibaba Group in May 2015.
In September 2019, Daniel Zhang officially succeeded Jack Ma as the Chairman of the Alibaba Group. A former senior executive at Alibaba commented, “Daniel Zhang is not someone with grand theories, but he gets things done.” Another person who directly reported to Daniel Zhang stated, “He has strong endurance, good physical stamina, and is willing to get his hands dirty and do the hard work.”
In March of this year, Alibaba implemented the largest organizational restructuring in its history. Daniel Zhang announced the implementation of the “1+6+N” management model, initiating corresponding changes within the various business groups and companies under Alibaba‘s umbrella.
The plan revealed that Alibaba Group would establish six major business groups, including Alibaba Cloud Intelligence, Taobao and Tmall Commerce, Local Services, International Digital Commerce, Cainiao, and Alibaba Digital Media and Entertainment. Each business group and company would have its own board of directors, and a CEO accountability system would be implemented under the leadership of the respective boards.
“Instead of putting diverse businesses together in one pot, in one listing vehicle, it is better to let them face the capital market independently when they meet the conditions for going public and mature,” Daniel Zhang stated at the time.
With Alibaba transforming into a conglomerate of holding companies, many Alibaba investors who had previously taken a back seat returned to the forefront, directly assuming roles as members of the various business group boards. The newly announced boards of the six major business groups at Alibaba have a total of 30 seats, with 19 individuals serving in these positions, of which 16 are Alibaba partners.
According to LatePost, in late May of this year, Jack Ma convened a small-scale meeting with business leaders of the Taotian Group. During the meeting, Jack Ma pointed out that the methodologies that Alibaba had relied on for success in the past may no longer be applicable and should be swiftly abandoned. He highlighted three directions for the Taotian Group: returning to Taobao, returning to users, and returning to the internet. Furthermore, Jack Ma believed that the Taotian Group should further flatten its organizational structure.
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