Board of Directors

Overall accountability

The members of the board of directors are individually and collectively accountable to the shareholders for the success and sustainable development of the Company. The board provides direction and approval in relation to matters concerning the Company’s business strategies, policies and plans, while the day-to-day business operations are delegated to the executive management. The board is accountable to the shareholders, and in discharging their corporate accountability, directors of the Company are required to pursue excellence in the interests of the shareholders and fulfil their fiduciary duties by applying the required levels of skill, care and diligence to a standard in accordance with the statutory requirements.

During the year, the board performed a self-evaluation of its performance and reviewed the contribution required from a director to perform his responsibilities. The board is of the view that all directors have given sufficient time and attention to the Company’s affairs and the board operates effectively as a whole. The board also noted the time involved by the directors in the Company and other public companies held by the directors.

Board composition and changes

During the year 2014, the Company announced the following changes in board composition.

At the 2014 AGM, Mr André Desmarais retired as a non-executive director of the Company by rotation and did not seek for re-election. Mr Peter Kruyt also ceased to act as the alternate director to Mr Desmarais on the same date accordingly. Mr Zeng Chen was appointed as an executive director of the Company with effect from the conclusion of the 2014 AGM to fill the vacated office following the retirement of Mr Desmarais. Mr Zeng was re-elected as director at the extraordinary general meeting of the Company held on 3 June 2014.

Upon completion of placing of the Company’s shares on 25 August 2014, Mr Gregory Lynn Curl was re-designated from independent non-executive director to non-executive director of the Company, details of which are set out in the Company’s announcement dated 25 August 2014. Following his re-designation, the number of independent non-executive directors has fallen below one-third of the number of members on the board required under Rule 3.10A of the Listing Rules. With the appointment of two independent non-executive directors in December 2014, the Company has complied with the requirement under Rule 3.10A of the Listing Rules.

After the successful acquisition of CITIC Corporation Limited, the primary operating arm of CITIC Group Corporation, on 25 August 2014 and given the substantial change in size and scale of the Company, the board made a careful assessment of its composition and announced changes in directorships. With effect from 26 September 2014, Mr Wang Jiong was appointed as an executive director, vice chairman and president of the Company; Mr Dou Jianzhong was appointed as an executive director and a vice president of the Company; and Mr Yu Zhensheng, Mr Yang Jinming, Ms Cao Pu and Mr Liu Zhongyuan were appointed as non-executive directors of the Company. In addition, Mr Wang Jiong was appointed as a member of the nomination committee and a vice chairman of the executive committee of the Company; Mr Dou Jianzhong was appointed as a member of the executive committee of the Company; Mr Yang Jinming was appointed as a member of the remuneration committee of the Company; and Ms Cao Pu was appointed as a member of the audit and risk management committee of the Company. Pursuant to the Company’s articles of association, each of the above directors shall hold office only until the next following annual general meeting, or if earlier, the next following extraordinary general meeting. On the same date, Mr Ju Weimin resigned as a non-executive director of the Company and was appointed as the chief financial officer and a member of the executive committee and vice president of the Company. He subsequently resigned as the chief financial officer and a member of the executive committee and vice president of the Company on 9 April 2015; Mr Vernon Francis Moore resigned as an executive director and chief financial officer of the Company; Mr Liu Jifu and Mr Zeng Chen resigned as executive directors of the Company; Mr Yin Ke resigned as a non-executive director and a member of the audit committee of the Company; Mr Gregory Lynn Curl resigned as a non-executive director and a member of both the nomination committee and remuneration committee of the Company; and Mr Carl Yung Ming Jie resigned as a non-executive director of the Company.

On 19 December 2014, Mr Liu Yeqiao was appointed as a non-executive director of the Company; Mr Anthony Francis Neoh and Ms Lee Boo Jin were appointed as independent non-executive directors of the Company.

The above changes to the board effectively align the executive board roles to manage the enlarged Company. The extensive experience and expertise of new members to the board are invaluable in the future growth and development of the Company’s businesses both in China and overseas.

The board currently has 14 directors, comprising four executive directors, five non-executive directors and five independent non-executive directors. Non-executive directors (including independent non-executive directors) comprise more than two-third of the board, of which independent non-executive directors satisfy the requirement of representing at least one-third of the board. The Company believes that the board has a balance of skills, experience and diversity of perspectives appropriate to the requirements of the Company’s business.

In relation to the five non-executive directors who are not independent (as considered by The Stock Exchange of Hong Kong Limited (the “Stock Exchange”)), Mr Yu Zhensheng, Mr Yang Jinming, Ms Cao Pu and Mr Liu Yeqiao are all non-executive directors of CITIC Group Corporation (the controlling shareholder of the Company) whilst Mr Liu Zhongyuan holds an executive position in the National Council for Social Security Fund, which is a substantial shareholder of the Company.

The Company has received from each independent non-executive director a confirmation of his/her independence pursuant to the independence guidelines set out in Rule 3.13 of the Listing Rules and considers that all independent non-executive directors are independent. Brief biographical particulars of the directors, together with information about the relationships among them, are set out on pages[102] to[105].

All directors, including the non-executive directors, have a specific term of appointment, which is not more than three years since his/her re-election by shareholders at the general meeting. Each director has entered into an appointment letter with the Company and pursuant to Article 104(A) of the Company’s articles of association, every director, including the non-executive directors, shall be subject to retirement by rotation at least once every three years. Retiring directors are eligible for re-election at the annual general meeting during which they retire. Separate resolutions are proposed for the election of each director. One-third of the directors, or if their number is not three or a multiple of three, then the number nearest to one-third, must retire from office at each annual general meeting and their re-election is subject to a vote of shareholders.

Pursuant to Article 95 of articles of association of the Company, Mr Wang Jiong, Mr Dou Jianzhong, Mr Yu Zhensheng, Mr Yang Jinming, Ms Cao Pu, Mr Liu Zhongyuan, Mr Liu Yeqiao, Mr Anthony Francis Neoh and Ms Lee Boo Jin who have been appointed during the year shall hold office only until the next following annual general meeting, or if earlier, the next following extraordinary general meeting of the Company and then shall be eligible for re-election at such meeting. All of the above directors were re-elected at the extraordinary general meeting held on 16 March 2015.

Board responsibilities and delegation

The board collectively determines the overall strategies of the Company,and monitors performance and the related risks and controls in pursuit of the strategic objectives of the Company. Day-to-day management of the Company is delegated to the executive director or officer in charge of the Company’s businesses and functions, who reports back to the board. All board members have separate and independent access to the management, and are provided with full and timely information about the conduct of the business and development of the Company, including reports and recommendations on significant matters. All board members are provided with monthly updates on the latest development of the Company’s businesses. Should separate independent professional advice be considered necessary by the directors, independent professional services would be made available to the directors upon request.

The board has delegated certain functions to the respective committees, the details of which are set out below. Matters specifically reserved for the board include approval of financial statements, dividend policy, significant changes in accounting policies, material contracts, selection of directors, changes to appointments such as company secretary and external auditor, remuneration policy for directors and senior management, terms of reference of board committees, as well as major corporate policies such as the code of conduct and whistle-blowing policy.

The Company has arranged Directors & Officers Liability and Company Reimbursement Insurance for its directors and officers with a combined aggregate limit of liability of HK$1 billion.

Details of the responsibilities, membership, attendance and activities during the year of each board committee are set out on pages [80] to [89].

Continuous professional development programme

After the acquisition of CITIC Corporation Limited, new directors were appointed in September and December 2014 respectively.The Company has arranged presentations given by external legal counsel to all new directors on corporate governance practices and relevant Hong Kong regulatory requirements as well as responsibilities as a director and the role of the board. In addition, each newly appointed director is provided with a package comprising the induction materials such as the duties and responsibilities of directors under the Listing Rules and the Companies Ordinance, guidelines for directors issued by the Companies Registry of Hong Kong, legal and other regulatory requirements and the governance policies of the Company.

The Company also has a continuous professional development programme (“CPD Programme”) for directors with an aim to improve their general understanding of the Company’s businesses, to refresh their knowledge and skills as well as to receive updates on developments in corporate governance practices. Directors may also choose to attend external courses, conferences and luncheons organised by various local organisations.

Under the Company’s CPD Programme, directors attended briefings, self-directed courses and seminars and reviewed the monthly business updates and other reading materials provided to them concerning the latest developments in corporate governance practices and relevant legal and regulatory developments. The Company has organised training provided by external legal counsel to the board. A record of the directors’ participation in the CPD Programme is kept at the company secretary’s office.

A summary of directors’ participation in the Company’s CPD Programme and other external training for the period from 1 January 2014 to 31 December 2014 is as follows:

Messrs Vernon Francis Moore, Liu Jifu and Zeng Chen resigned as executive directors, and Messrs Ju Weimin, Yin Ke, Carl Yung Ming Jie and Gregory Lynn Curl resigned as non-executive directors, all with effect from 26 September 2014. Mr André Desmarais retired as a non-executive director and did not seek for re-election at the 2014 AGM. Mr Peter Kruyt also ceased to act as the alternate director to Mr André Desmarais accordingly. Reading materials, regulatory updates and management monthly updates were provided to the above directors during the period of their appointment.

Board meetings and attendance

The board meets regularly to review the financial and operating performance of the Company and to discuss future strategy. Four regular board meetings and three special board meetings were held in 2014. At the board meetings, the board reviewed significant matters including the Company’s annual and half-year financial statements, annual budget, proposals for final and interim dividends, annual report and half-year report, and notifiable transactions and connected transactions. At each of the regular board meetings, the board received a written report from the president on the Company’s major businesses, investments and projects, and corporate activities. During the year the board received updates on the Sino Iron project. A special board meeting was held in March 2014 to approve a conditional framework agreement for the acquisition of 100% of the total issued share capital of CITIC Corporation Limited (the “Acquisition”). Another special board meeting was held in April 2014 to approve the Acquisition, share transfer agreement and other matters relating to the Acquisition. Details of the above framework agreement and the Acquisition are set out in the Company’s announcements dated 26 March 2014 and 16 April 2014 respectively. As the Acquisition resulted in a substantial change in the size and scale of the Company, there are changes to the board composition to ensure effective and rigorous leadership, oversight and governance. A meeting of the new board was held in September 2014 mainly to approve the change of board committees and their composition, to introduce the new senior management and to approve the continuing connected transactions with CITIC Group Corporation and/or its associates. A schedule of board meeting dates is fixed for each year in advance. At least 14 days’ formal notice of all regular board meetings is given to all directors, and all directors are given the opportunity to include matters for discussion in the agenda. The agenda and board papers for each meeting are sent to all directors at least three days in advance of every regular board meeting. All minutes of the board meetings are kept at the company secretary’s office. Copies are provided to directors and the original minutes are available to all directors for inspection. In addition to the board meetings, the chairman also meets with the non-executive directors (including independent non-executive directors) without the presence of executive directors on an annual basis.

The attendance record of each director at board meetings and general meetings in 2014 is set out below:

At the extraordinary general meeting of the Company held on 16 March 2015, and except for those who had other engagement, all the other directors attended the meeting.

Chairman and the president

Mr Chang Zhenming serves as the chairman of the Company. Mr Wang Jiong is the president of the Company from 26 September 2014. Mr Zhang Jijing was the president of the Company prior to 26 September 2014. The president plays the same role and has the same responsibilities as that of the managing director. The chairman and the president have separate defined responsibilities whereby the chairman is primarily responsible for leadership and effective functioning of the board, ensuring key issues are promptly addressed by the board, as well as providing strategic direction for the Company. The president is responsible for the day-to-day management of the Company and the effective implementation of corporate strategy and policies. Their respective roles and responsibilities are set out in writing, which have been approved and adopted by the board.