Huawei Braces for Board Revamp as Western Markets Beckon

Huawei Braces for Board Revamp as Western Markets Beckon

Huawei will shake up its board for the first time in six years as the Chinese company prepares to push deeper into developed markets such as the U.S. for growth, according to Bloomberg.

China’s largest networking gear maker will in 2018 elect directors for the first time since 2012, rotating CEO Guo Ping said in an interview. That’ll reshape the board at a company controlled by ex-army engineer Ren Zhengfei, and infuse new blood into a telecoms giant that last year became the world’s third largest mobile phone brand.

It’s now eyeing new businesses such as the cloud, and markets from Europe to Japan. Huawei, which in 2016 declared it will someday surpass both Apple and Samsung in market share, has long been hampered in the U.S. by questions over its links to the Chinese government. But Huawei could conceivably enter the market through partnerships with local providers, though Guo said the priority for now was to strengthen its existing positions.

Next year, representatives appointed by shareholder-employees will vote on a slate of new directors to be nominated by the current 17-member board. It’s unclear whether the 72-year-old Ren, who founded the company in 1987, will remain and Guo didn’t address that specifically.

Huawei is one of a handful of Chinese companies to have built a global business over the past decade, initially using low-cost networking gear to gain market share abroad. But a breakneck expansion from equipment maker to mobile brand has come at a cost. Its earnings grew at their slowest pace in five years in 2016, as it sank money into 5G research and a marketing blitz.

Its main business of telecoms gear is slowing as phone carriers rein in network rollouts to prepare for the advent of faster 5G standards. Later this year, its Mate 10 will go head-to-head with the hotly anticipated 10th-anniversary edition of Apple’s iPhone.

The company is now in the midst of a re-think about the way it conducts business. The focus is on profitability, exploring overseas business and moving its smartphones higher up the value chain, where it will clash with Apple and Samsung more often. Executives have also spoken publicly about the need to re-tool a culture bogged down by bureaucracy and waste.

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