“Nvidia’s board of directors meets to decide on the future of Jensen Huang… Looking for a successor CEO” (Comprehensive 2nd report)

Just three days after Nvidia CEO Jensen Huang admitted to an affair, the board of directors began preparing for his dismissal.

It was revealed that the board of directors was also working with an external company to find a successor CEO.

Reuters and Bloomberg reported, citing people familiar with the matter, that Nvidia's board of directors is holding a meeting on the 11th (local time) to decide on CEO Hwang's future.

On the 8th, the Board of Directors formed an independent committee to investigate, saying, "There is no basis to believe that national security or Nvidia secrets were leaked," and expressed trust by saying, "We trust Jensen and the management," but this attitude appears to have reversed after three days.

In particular, the meeting was held just one day after the appointment of Jun Kim, a Korean lawyer and former U.S. federal prosecutor, as the person in charge of the investigation.

The Washington Post (WP) quoted a source as saying that the White House is not currently involved in the board's decision.

It has been reported that the board of directors has already been working with an external professional company to find CEO Hwang's successor.

The board of directors is also considering appointing an executive to take on the position on an interim basis while a full-time CEO is searched.

Accordingly, it appears that the CEO is being dismissed before a thorough and detailed investigation can actually be conducted.

It is interpreted that this is because the affair partner, Alice Huang (Chinese name: Huang Le), was pointed out as a spy for the Chinese intelligence agency, and this incident escalated from a simple affair to a national security-related issue.

The Information, a media outlet specializing in information technology (IT), previously reported that Alice Hwang abused her relationship with CEO Hwang to smuggle in $7.5 billion (approximately 10 trillion won) worth of Nvidia chips that were banned from being exported to China.

If CEO Hwang continues to remain in office, NVIDIA will be under intensive surveillance not only within the company, but also from investors and customers, as well as politicians and investigative agencies.

In particular, it is expected that it will be difficult for CEO Hwang to carry out the company's business normally in a situation where Congress, including the federal Senate and House of Representatives, has already requested CEO Hwang's attendance and announced an investigation.

In addition, suspicions were raised that CEO Hwang had an extramarital affair with a female Nvidia executive who was his direct subordinate, and the company appears to have changed its stance toward dismissing him.

Nvidia, like other American companies, has a code prohibiting inappropriate relationships within the company due to issues such as conflicts of interest, and stipulates that an investigation be initiated immediately when reports of such behavior are received.

If the leak of company secrets or national security is not confirmed, the affair with Alice Hwang can be dismissed as simple morality or personal privacy, but an inappropriate relationship within the company can become a serious disciplinary matter.

However, it is possible that the purpose of removing CEO Hwang from his position before a full-scale investigation related to the previously raised suspicions was to secure the independence and objectivity of the investigation.

So far, business ethics experts, including those in industry and management academia, have continued to point out that CEO Hwang should be excluded from his duties, at least while the investigation is ongoing.

The market is also paying close attention to who will take over when CEO Hwang steps down.

Previously, Chief Financial Officer Colette Kress and Vice President Ian Buck, who created Nvidia's software platform 'CUDA', along with CEO Hwang's children Madison and Spencer Hwang and son-in-law, Vice President Nico Caprez, were mentioned.

However, given that the board of directors is cooperating with an external company, it appears that if CEO Hwang is dismissed, a new CEO may be recruited from outside the company.