Cao Hui, in both capability and seniority, is indeed not as strong as some of the managers who have fought alongside me for years. But he is a major shareholder of Fuyao, and more importantly, the "root" that binds this family to the enterprise. What I am handing over is not the chairman's seat, but the product system and management institutions that Fuyao has built up over decades.
On October 16, 2025, Fuyao Glass announced its chairman succession. Unlike most companies that keep their choice of successor shrouded in secrecy, and unlike the simplistic narrative of a father passing the business to his son, when Cao Dewang pushed his son Cao Hui to the fore, he neither glossed over his weaknesses nor mythologized his ability. Instead, with three keywords—"a decade of cultivation," "a handover at the peak," and "institutional continuity"—he outlined a strategic succession long in the making. While the outside world marveled at "why Cao Dewang suddenly retired," a look at Fuyao Glass's trajectory from 2015 to 2025 shows this transition was not "a sudden final chapter" but "the prologue to a decade-long plan." Its essence is a critical leap for Chinese private enterprises from "founder authority" to "institutional governance," providing a replicable model for how Chinese companies can endure.
01 Stepping Down at the Peak: Certainty Built Over a Decade
The common predicament of succession in Chinese private enterprises often stems from the "passivity of timing"—handing over in haste because of the founder's health, or "dumping the burden" when performance declines, leaving the successor mired in the infighting of "cleaning up a mess." Cao Dewang's choice broke out of this frame: he stepped down voluntarily while the business was performing well, creating an operating environment for Cao Hui that had "no performance pressure and institutional support." The formation of this situation grew out of a complete decade-long groundwork, from "cultivating the person" to "validating the capability."
1. Timing: Using "Steady Growth" to Underpin Confidence in the Succession
When Cao Dewang chose to retire, Fuyao Glass was in a period of steady growth. Looking at the business trajectory, when Cao Hui first became vice chairman in 2015, Fuyao Glass's revenue was still at the tens-of-billions level; by 2024, the company's revenue had entered the near 40-billion tier, with net profit rising steadily in tandem. This decade of continuous growth meant the succession faced no pressure to "put out performance fires"—what Cao Hui inherited was not merely a title, but an operating system validated by the market.
Compared with some private enterprises that "forced the heir into the saddle" during volatile performance, Fuyao's "handover at the peak" was essentially a "transfer of confidence": for employees, a stable operating foundation meant no disruption to their careers; for partners, a management change would not affect the continuity of cooperation policy; for the market, the company's growth logic was unchanged, so there was no need to worry about operational risk from the succession. This "pressure-free handover" cleared the initial obstacles for Cao Hui to move forward with his work.
2. Groundwork on the Person: A Decade of Training from "Vice Chairman" to "Business Operator"
Cao Hui's succession was not an "airdropped coronation" but the result of "step-by-step growth." In 2015, Cao Dewang appointed Cao Hui as vice chairman of Fuyao Glass. Over the following decade, Cao Hui's role gradually shifted from "observer" to "core participant," deeply involved in key businesses such as the company's global expansion and product-line upgrades:
In global expansion, Cao Hui led the launch and operation of Fuyao's U.S. factory. In its early days the plant faced challenges such as cultural adaptation and supply-chain coordination; Cao Hui pushed "localized sourcing + lean production" reforms by basing himself on site, ultimately bringing the factory to profitability and making it an important pillar of Fuyao's overseas business.
In product upgrading, Cao Hui spearheaded the R&D and mass production of "smart coating technology" for automotive glass. Adapting to the needs of intelligent cockpits in new-energy vehicles, the technology was gradually fitted to leading automakers after launch, steadily raising the revenue share of Fuyao's high-value-added products.
Over the decade, Cao Hui's growth trajectory always centered on "real business combat": he did not rely on the privileged status of being "the founder's son," but accumulated management experience and built internal recognition by participating in concrete businesses. This cultivation path of "proving capability in real combat" avoided the common trap of "a rich second-generation who knows nothing about the business," and won him "capability-based recognition" rather than mere "identity-based recognition" from management and staff.
02 Institutional Continuity: Systematic Continuity in Place of Power Transfer
A common misconception in Chinese private-enterprise succession is to equate "succession" with "transfer of power," believing the task is done once the position is given to a family member. But Fuyao's succession logic broke out of this limitation—Cao Dewang's core idea is that "the handover is not only a transfer of power but also the continuation of the product system and management institutions." Behind this understanding lie three underlying logics that distinguish it from traditional succession.
1. Logic One: The Core of Succession Is "System Continuity," Not "Personal Substitution"
Cao Dewang has repeatedly emphasized in public that Fuyao's competitiveness does not depend on personal judgment but stems from product standards, management institutions, and operating processes accumulated over decades. Therefore, the key to succession is not "how Cao Hui replaces Cao Dewang" but "how to keep the existing system running effectively."
Take Fuyao's cost-control system as an example: built around "full-chain cost accounting," it has clear standards from raw-material procurement to finished-product transport, validated by the market over a long period. During his tenure, Cao Hui did not overturn this system but optimized its efficiency by introducing digital tools. This approach of "unchanged institutions, upgraded technology" preserved Fuyao's core competitiveness while also demonstrating the successor's value: not to "start from scratch" but to "optimize on the existing foundation."
Compared with cases where "radical reform caused systemic collapse" in some private-enterprise successions, Fuyao's "system continuity" logic is all the more robust: the "root" of the enterprise lies not in the founder but in "an institution system validated by the market." As long as the system is not destroyed, the enterprise can maintain operational continuity even when management changes.
2. Logic Two: Drawing on Century-Old Enterprises to Clarify the "Boundary Between Family and Enterprise"
In Cao Dewang's succession philosophy, he explicitly mentions drawing on the governance model of century-old German enterprises: the core is "family belongs to family, enterprise belongs to enterprise"—family members may be shareholders, but operating rights must rest on institutional norms rather than "family one-voice rule."
This philosophy has already been put into practice in Fuyao's governance structure: after Cao Hui became chairman, the board retained several independent directors covering industry, finance, law, and other fields, and major decisions require collective board deliberation. This "check-and-balance mechanism" avoids the risk of "family interests overriding enterprise interests"—even a proposal from the chairman must pass professional review and collective decision-making, ensuring decisions serve the enterprise's long-term development rather than the short-term wishes of an individual or family.
This sense of "boundary" is the key to private-enterprise succession: the family may be bound to the enterprise by "honor" but not by "operating rights"; it may gain returns through equity but must not intervene in operations through identity. Only by clarifying this boundary can an enterprise shed "family dependence" and move toward institutional governance.
3. Logic Three: Family Honor Bound to Enterprise Responsibility, Not "Family Interests First"
In Fuyao's succession framework, the binding point between "family" and "enterprise" is not "ownership" but "responsibility": the family's honor lies not in "controlling the enterprise" but in "driving the enterprise to create value for society."
This "responsibility binding" is reflected on two levels: first, family members must prove their worth through "performance"—during his vice chairmanship, Cao Hui's compensation was tied to business metrics, and he voluntarily adjusted his pay when targets fell short; second, the family must bear the enterprise's social responsibility—the charitable foundation Cao Dewang established continued to invest in education, poverty alleviation, and other fields after Cao Hui took over, deeply integrating enterprise development with social value creation.
This logic breaks the traditional notion that "family succession = interest succession": for family members to gain recognition, they must rely on capability rather than identity; for the family to sustain its honor, it must rely on the enterprise's social contribution rather than mere scale expansion. This "responsibility-oriented" succession lifts the enterprise beyond the limits of "family self-interest" and gives it a longer-term development perspective.
03 Breaking the Myths: Founders Must Shift Their Mindset and Plan Ahead
The reason Fuyao Glass's succession can serve as a model is that it breaks three common myths in Chinese private-enterprise succession and offers a reference case.
1. Myth One: "Succession is the 'last step' — arrange it when you're old" — The right approach: "A decade-long plan, step-by-step cultivation"
Most private-enterprise founders' planning for succession stays at the level of "last-minute arrangement," leaving successors without enough tempering. Fuyao's lesson is this: succession should be a "long-term strategy," launched at least a decade ahead, and the cultivation path must center on "real business combat"—let the successor start from a frontline post or as head of a core business, gradually learn the operating logic, accumulate practical experience, and build internal recognition.
The key to this "step-by-step cultivation" is to "keep the successor close to the business": no "learning in the office," but deep involvement in concrete projects; no "special treatment," but letting performance speak. Only after about a decade of real-world polishing can the successor truly understand the enterprise's core logic and win broad internal recognition.
2. Myth Two: "Succession is 'family privacy' — no need to be transparent" — The right approach: "Candid communication, confidence transfer"
Many private enterprises keep succession "confidential," which leads to market speculation and, in turn, turmoil. Fuyao's approach is "candid communication": announce the succession plan publicly, make clear that the core of the handover is "institutional continuity," and do not shy away from the successor's growth process or the enterprise's operating reality.
The value of this "transparency" is to reduce "information asymmetry": internally, employees know that "institutions and direction are unchanged" and need not worry about their posts or development; externally, partners and the market know that "the operating logic is unchanged" and need not adjust cooperation strategies or investment judgments. Succession is not a "family matter" but a major enterprise strategy, and candid communication is the "soft power" that reduces succession risk.
3. Myth Three: "Succession is 'power transfer' — done once power is handed over" — The right approach: "Institutions first, let the system outlive the person"
A major pain point for Chinese private enterprises is "the enterprise thrives while the founder is present, and declines once the founder withdraws," the core reason being that "competitiveness depends on personal authority rather than an institutional system." Fuyao's central lesson is this: the ultimate goal of succession is to "let institutions outlive the person"—before the founder retires, build a market-validated product system, management institutions, and governance structure so the enterprise runs without depending on any individual.
Specifically, this can be advanced along three dimensions: first, codify product standards and R&D processes to ensure core competitiveness does not weaken with management changes; second, refine management institutions—cost control, supply-chain management, talent incentives, and the like—to keep operational efficiency stable; third, establish governance check-and-balance mechanisms, bringing in independent directors and professional managers to avoid "one-voice rule." Only when an enterprise's competitiveness shifts from "personal authority" to "institutional system" can succession truly achieve "enduring legacy."
Cao Dewang's retirement did not trigger operational turmoil at Fuyao Glass, precisely because over a decade he transformed Fuyao from "an enterprise that depends on a person" into "an enterprise that depends on institutions." For Chinese private enterprises, the ultimate meaning of succession is not "family continuity" but "enterprise continuity": not "letting the enterprise belong to a certain family" but "letting the enterprise keep creating value for society," thereby "making the enterprise endure."
