Soft succession

SoftBank's next boss more symbol than succession

SoftBank chairman Masayoshi Son has named an heir apparent. Though since he has no plans to retire, it's not obvious that much change is in store for the Japanese tech conglomerate. Declaring ex-Google executive Nikesh Arora as Son's likely successor looks more like a symbol than a move towards succession.

Just 10 months after he joined SoftBank to head its global internet investments, the 47-year-old Arora has been named the first ever president of the group and effectively Son's right-hand man. The company has never had either a president, let alone a non-Japanese one. Arora has helped to grow SoftBank's international internet investments in places like India and Indonesia and will continue to do so from his base in Silicon Valley.

Beyond making Arora feel more valued, it's not clear what this achieves. Arora's appointment brings no real transfer of power. SoftBank's telecom operations in Japan will continue to be run by long-time insider Ken Miyauchi. Son will continue as the group's charismatic chairman and chief executive, and is a relatively youthful 57 - so while he has explicitly named Arora as his likely successor, there's no guarantee the transition will happen as planned.

Even without a high-level foreign executive, SoftBank was already pretty international. Just 55 per cent of revenue came from its Japanese telecom operations in the year that ended in March. Much of SoftBank's value is comprised of its investment in US mobile carrier Sprint and its 32.6 per cent stake in Chinese e-commerce group Alibaba. Foreigners including Alibaba boss Jack Ma and Goldman Sachs Asia head Mark Schwartz already sit on the board. SoftBank also plans to invest $10 billion in India over the next decade.

SoftBank deserves praise for openly talking about succession before it has even become an issue. Compare its partner Alibaba, which suddenly replaced its chief executive last week without any explanation. Arora's promotion may in reality just be just a symbol of his employer's international ambitions and a reward for a job well done, but it is also the sign of a company that cares what its investors think.