HONG KONG (Reuters Breakingviews) - One knot is better than two. Ping An founder Ma Mingzhe has given up his role as chief executive but will remain chairman of the $187 billion Chinese insurer. The split is welcome, but quirky governance endures with three other co-CEOs below him. Multiple bosses can be effective when responsibilities are clearly divided. Luckily, Ping An mostly appears to have ticked that box.
The tech-savvy group has mostly delivered for investors, earning a more than 20% total annualised return since it listed in Hong Kong in 2004, more than double that of the benchmark Hang Seng Index. But Ma has held tight control since establishing the company over three decades ago.
Splitting the top jobs will better prepare for any future leadership transition as conflicts of interest tend to arise when one person holds both. But Ping An’s remaining leadership structure is still pretty new – it only introduced the three co-CEO model in 2018. And one of the set, Lee Yuan Siong, has already left to lead rival AIA.
There is precedent. Safra Catz and Mark Hurd together oversaw software giant Oracle for five years until Hurd’s death in 2019, and the three co-CEO setup has mostly worked at South Korean conglomerate Samsung, which has been roiled more by corruption scandals than operational issues.
But there are also plenty of examples of where things turned sour, particularly on Wall Street. At Goldman Sachs, the joint leadership of co-chief executives Jon Corzine and Henry Paulson in the late 1990s devolved into an ugly power struggle. The model can go awry within divisional units, too. Paul Taubman and Colm Kelleher’s strained relationship as co-presidents of institutional securities became a source of internal conflict at Morgan Stanley a decade ago.
History suggests having multiple bosses works best when roles are clearly divided. At Ping An, Xie Yonglin runs the financial services unit, Jessica Tan is in charge of technology and innovation, while Yao Bo – named on Wednesday as Lee’s replacement – will largely be in charge of strategy and finance. The latter role will have some overlap, but for now Ping An has unravelled at least one potential leadership knot.
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