Huawei

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Huawei has been far from silent

By May 9, 2013: 1:12 PM ET

Yes, Ren Zhengfei wields enormous power over the Chinese telecom giant. But the company's management is far more complex.

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FORTUNE -- You may have read that Ren Zhengfei, founder and chief executive officer of Chinese telecommunications giant Huawei, has finally broken his media silence. The reclusive CEO gave his first public media briefing in -- of all places -- Wellington, New Zealand, where he addressed security concerns about his company and his involvement in China's Communist Party. There's more to the story than the headlines making the rounds today suggest.

While Ren is the official chief executive of Huawei -- and has been since the company's founding two and a half decades ago -- he recently initiated an unusual governance structure in which three "rotating acting CEOs" work under him and shift power every six months. And those interim CEOs -- who are quite possibly being groomed to take over the company someday soon -- aren't as gun-shy around the media. In fact the Chinese titan has been on a charm offensive of sorts. Its presence, for example, at this year's Mobile World Congress in Barcelona could be described as overwhelming. Its ads were everywhere, and the company set up two sprawling booths -- one to showcase its consumer handsets and tablets and another to display telecom equipment. It also touted its Ascend P2, which it dubbed the "world's fastest smartphone."

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Fortune recently caught up with Guo Ping, one of Huawei's rotating acting CEOs, to find out more about how the executive rotation works. (Several tech companies, including SAP (SAP) and BlackBerry (BBRY), have a history of co-CEOs, but having three chief executives taking turns at the helm is far from common.) Through an interpreter, he described how during each stint, the rotating acting CEO is responsible for the company's financial performance and is expected to take the lead in any crisis. Once their turn is up, they go back to their regular corporate duties and still have a say in the company's decisions via a seven-person executive management team. Here is some of what he said at the time:

Your leadership structure is unusual. How does it work?
I think first of all I can introduce to you how we came to this system of rotating. I remember that in 2004 Mercer [a New York-based consulting firm] helped us establish our executive management team [EMT]. Their initial proposal was that Mr. Ren would be the chair of the EMT. However, Mr. Ren did not want to work like that and he did not want to take such a chair position. He wanted the other members to rotate and chair the EMT. So that's what we did from 2004 to last year. So in the past there used to be eight people rotating as chair of EMT, and now in 2012 three people became the rotating CEO. There are two major responsibilities if you are a rotating acting CEO. Number one is he or she is responsible for the financial results and number two is to take the lead in emergencies or crisis handling. The other seven people [on the EMT] make collective decisions as a team, for promotion of high-level managers or changes in salary structures. And after one's term as a rotating CEO, he or she will still be in this seven-person team and participate in this collective decision-making.

So is every decision consensus driven?
For different matters there are different mechanisms to make decisions. There are some matters where the rotating active CEO can make decisions by themselves and there are some matters where if the majority agrees they can pass. And there are also some other matters that need to be submitted to the board for approval. So we have the all hands meeting for the board every month. And these seven people [from the EMT] are also members of the board.

Whose responsibility is it to set the vision of the company? Is that Mr. Ren's role?
Mr. Ren will be present in every month's board meeting. He is a member of the board. But he's not among the seven-person decision-making team. So when we had the business objectives and business plan for 2013, they needed to be approved by the board. So there are different obligations and authority for the board, for the seven-person decision-making team and also for the rotating CEO.

Of course, Ren is still the top dog at Huawei, and it's not clear exactly how much power these rotating acting CEOs have during their tenure. Still, despite the headlines, Huawei has been far from quiet.

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