Alibaba Chairman Jack Ma Explains the Partnership System that May Stand in the Way of Hong Kong IPO

Jack Ma, board chairman of Alibaba Group, announced in an internal email today that the company established a partnership system three years ago in order to build a new organizational model. 18 founders of the e-commerce giant resigned their founder status in 2010 to give way for the establishment of the system.

It was reported that Alibaba planned to go public in Hong Kong where the dual-class stock structure isn’t allowed. The partnership system is a countermeasure for Jack Ma and top management to maintain control of the company after Alibaba is listed on Hong Kong, because the structure will allow the partner team led by Jack Ma to nominate over half of board members.

Ma disclosed that the company now has 28 partners. They are the company’s shareholders, operators, business developers, and enterprise culture practitioners, who will contribute to the long-term benefits of Alibaba’s customers, employees and shareholders, he added.

The partner candidates have to work in Alibaba for more than five years. Potential partners are elected by current ones on an annual basis with unfixed electoral quota. Each current partner has one vote and candidates have to win more than 75% of the votes in order to get elected. The partners have no fixed term of office.

Ma responded in the email that the structure will not generate an exclusive interest group but to forge a dynamic mechanism so as to guarantee continuous innovation.