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The New York Times reported that Huang Renxun’s extramarital affair not only prompted Huida to launch an investigation, but also highlighted governance concerns of the company’s long-term compliance with the board of directors, inadequate succession planning and excessive reliance on a single leader.
CEO of Nvidia (also translated as Nvidia)Jen-Hsun Huang Admitted having sex with a man believed to be Chinese by US intelligence agenciesdetective Female entrepreneurs have an affair Business management experts questioned whether Huida’s board of directors seemed too submissive to Huang Renxun, and also highlighted Huida’s governance problem of lack of succession area for many years.
Huida has gone through a difficult start-up period. The New York Times reported that in 1993, Sequoia Capital and Sutter Hill Ventures jointly led a $2 million fundraising round. Sequoia partner Mark A. Stevens and Sutter Hill’s Tench Cox later joined the board of directors and experienced firsthand the low point of Huida’s cash-burn crisis and initial product failure.
Stevens recalled in a podcast in 2023: “At the time, we weren’t sure that Huida would ultimately be able to break out of its cocoon and fly high. We were very worried, would the company be ruined by us like this?”
But now Huida’s 10-member board, which includes early investors, long-term partners and other corporate executives, faces a tough task: vetting its illustrious CEO. Jen-Hsun Huang admitted on the 8th that he had an extramarital affair with a businesswoman, and that the US intelligence agency determined that woman to be a Chinese spy.
The New York Times reported that the board of directors of Huida, which will initiate the investigation of Huang Renxun, has a record of being very loyal and courteous to Huang Renxun. Therefore, it seems that the entire board of directors did not expect that Huang Renxun, who single-handedly led the company, could become the backdoor of the company.
Huida also appears to have no succession plan for Huang, and no clear internal candidate to succeed him. Huang Renxun, 63, said in 2023 that he was confident he could lead Huida for the next 30 to 40 years.
Several former Huida executives said Huang’s succession plan had been discussed within the company for years, but Huang himself had opposed it.
René Haas, the current CEO of major chip design company Arm Holdings, worked at Huida from 2006 to 2013. He reported that Huida had discussed the succession plan internally several times, but Huang Renxun was extremely disappointed.
Haas said, “He didn’t like the idea. He thought it would create competition among senior officers, which would lead to internal division.”
HUIDA’s current 10 directors have a combined tenure of 161 years, including former Synopsys CEO Harvey C. Jones and CFO A. Brooke Sewell, who joined in the 1990s. Both of them have a long-time friendship with Jen-Hsun Huang. Jen-Hsun Huang has proven time and again in the past that his bold decisions can often bring huge returns to investors.
According to three former Huida employees, Huang regarded the board of directors as merely a “requirement for regulatory governance” rather than as the core of decision making and strategy. While building a senior management team, he also adopted a solitary approach, emphasizing the need to break down bureaucratic management concepts to enable the company to make key decisions quickly. Huang personally has more than 60 direct subordinates and takes all important decisions personally.
The company’s independent directors will select external legal counsel to handle the investigation; A company spokesperson said Huang would not participate in the selection process but would continue to lead Huida during the investigation. But for a company that is so dependent on a single leader, Huida’s current situation is indeed facing great challenges.
According to five current and former employees, Huang Renxun also gave considerable power and authority at Huida to her children. His son serves as director of product management and plays a key role in the robotics business; His daughter is the senior director of product marketing and is also involved in the robotics business and company communications and marketing. Huang’s son-in-law is responsible for the company’s business development.
This led some people in the company to assume that Huang was courting his children in preparation for his future succession. However, when a reporter asked Huang Renxun in an interview last month whether his daughter would succeed him, he replied, “I don’t want her to take over.”
As the largest individual shareholder, holding 3.56% of the shares, Huang Renxun is deeply connected to this chip giant with a market value of more than US$4 trillion. Huang Renxun said at the beginning of the year: “If the CEO does not meet the requirements of more than a dozen directors, he will be fired; but there will be no one in the world except me, because I was developed by this company.”
