Masayoshi Son: How Can the Founder-CEO of SoftBank Navigate the Challenges?
| Case Code: BECG183 Case Length: 12 Pages Period: 2020-2023 Pub Date: 2024 Teaching Note: Available |
Price: Rs.400 Organization: SoftBank Group Corp Industry: Conglomerate Countries: Japan Themes: Investment Decisions, Governance PracticesFamily Business,Venture Capital |
Abstract Case Intro 1 Case Intro 2 Excerpts
Abstract
The case discusses the challenges faced by Masayoshi Son (Son), founder and CEO of Japanese multinational investment management company SoftBank Group Corp. (SoftBank), in running the company. Son also came under immense scrutiny from SoftBank’s investors after the company’s venture capital arm Vision Fund recorded losses of US$32 billion for the financial year ended March 31, 2023. He was also criticized by SoftBank’s investors as he had made colossal investments in companies which were recording huge losses. His increasing stake in SoftBank, which went from 26.7% in March 2019 to 34.2% in September 2022, also left investors concerned, as they felt that Son could wield more control than before over decisions relating to mergers, buybacks, asset sales, and corporate bylaws and give him the power to pass any special resolution before the shareholders.
Son was also criticized by corporate governance experts for mixing personal interest with company responsibilities as he had acquired stakes in several investment funds owned by SoftBank in a bid to increase his remuneration. Critics also questioned Son for not having a succession plan in place as he stated that he would continue leading the company even after his late sixties.
In light of these challenges, what steps should Son and his team take to contain losses at the company’s Vision Fund and regain the confidence of its investors? How should he improve SoftBank’s corporate governance practices and execute a succession plan at the company?
Issues
The case is structured to achieve the following teaching objectives:
- Understand the pros and cons of the founder of a large enterprise also serving as the CEO
- Examine how corporate governance and control mechanisms enable the efficient functioning of a large enterprise
- Examine the challenges of CEO succession planning in a founder-led enterprise
Contents
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Introduction
About Softbank and Masayoshi Son
Masayoshi Son’s Investment Decisions
Corporate Governance Concerns at Softbank
Lack of Succession Planning
Looking Ahead
Exhibits
Keywords
SoftBank Group Corp; SoftBank Ventures Asia; Masayoshi Son; The EdgeOf; Vision Fund; Vision Fund 2; Investment committee; Investment management; Venture Capital; Governance failures; Succession planning; Board of Directors; Successor; Shareholders; Investors
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