21 April 2019
Vanke chairman Wang Shi (L) and president Yu Liang (R) have been facing a challenge from major shareholders Baoneng and China Resources Group. Photo: HKEJ
Vanke chairman Wang Shi (L) and president Yu Liang (R) have been facing a challenge from major shareholders Baoneng and China Resources Group. Photo: HKEJ

What Vanke can learn from Cristiano Ronaldo

Euro 2016 is finally over. Portugal bagged the championship even though its captain, Cristiano Ronaldo, was stretchered out of the stadium in the first half due to a knee injury.

Many people thought that Portugal would lose the game without its star striker Ronaldo. However, Portugal beat France as Éder, a substitute player, scored a crucial goal.

Amid the cheers, Ronaldo has faced some embarrassment as people remarked that sometimes a team can benefit if the leader is absent.

Some football commentators and fans had earlier criticized the 31-year-old Ronaldo for becoming overbearing. The captain was accused of asking the whole team to focus on him, and that they should assist him in scoring goals.

Ronaldo would get mad if his team players failed to do so, critics noted.

The strategy works well sometimes but not always. Meanwhile, as rival teams are also aware of the strategy, they can take counter measures.

Looking back at all its seven games in Euro 2016, Portugal only won one match within the 90-minute time. The team won all the other six matches in extra time, or even in penalty shootout.

After Ronaldo was forced to quit the final due to injury, the match outcome proved that while stars win headlines, teams win trophies.

The players got a chance to play for the team, instead just for one man.

Now, this offers a lesson for Chinese property developer Vanke and its chairman Wang Shi. 

As founder of China’s largest property company, Wang has long been recognized a super-star among Chinese entrepreneurs.

Among his various exploits, Wang has successfully scaled the summit of Everest and also traversed the South and North Poles.

His personal life has also dominated the headlines. After divorcing his wife in 2012, Wang started dating the actress Tian Pujun.

Wang had collected nearly 10 million yuan in salary each year, even though he was more of a non-executive chairman, staying abroad for long periods.

Vanke’s president, Yu Liang, actually took care of running the company and handling its day-to-day affairs.

Wang was once very proud of this, proclaiming that he had succeeded in building good corporate governance and structure within Vanke.

“If the company does not need me anymore, that’s success,” he said.

Unlike Ronaldo, Wang decided to take his hands off and let his team to do the job.

However, the situation appears to have changed as the company found itself in a boardroom battle after Baoneng Group accumulated a significant stake in Vanke last year.

Sensing a threat, Wang and his team tried to checkmate Baoneng by announcing that they will issue new shares to Shenzhen Metro and make the latter the biggest shareholder.

The share issue plan was opposed by Baoneng as well as China Resources Group, another major existing shareholder.

With a tussle between the two biggest shareholders and the management team, Wang has come under fire.

If Wang decides to quit and allow Yu to take the reins, Baoneng and China Resources will welcome that.

The move can help Vanke maintain its excellent management team and run smoothly, while also help resolve the fight over control of the company.

It will be a win-win situation for all.

Wang has built a good management team and instilled great corporate governance concepts into Vanke.

However, he has failed to secure a majority stake in the company as it was transformed into a private enterprise.

The businessman now stands at the edge of a precipice. It is up to him to take some steps and come out of the difficult situation.

Vanke, meanwhile, could take a lesson from the Portugal football team’s experience with Ronaldo and realize that sometimes it is better to let the team fly on its own. 

This article appeared in the Hong Kong Economic Journal on July 12.

Translation by Julie Zhu

[Chinese version 中文版]

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Hong Kong Economic Journal columnist

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