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 CITIC Limited. The board provides direction and approval in relation to matters concerning CITIC Limited’s business strategies, policies and plans, while the day-to-day business operations are delegated to the executive committee. In discharging their corporate accountability, directors of CITIC Limited 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 under review, the board performed a self-evaluation of its performance and reviewed the contribution required from a director to perform his/her responsibilities. The board is of the view that all directors have given sufficient time and attention to CITIC Limited’s affairs and the board operates effectively as a whole. The board also noted the time involved by the directors in CITIC Limited and other public companies held by the directors. Mr Francis Siu Wai Keung, an independent non-executive director, has devoted sufficient time to the board notwithstanding that he currently holds directorships in six public companies (including CITIC Limited). He is the chairman of the audit and risk management committee and a member of a numberof board committees which he attended and actively provided guidance and recommendations in each committee meeting. He also attended all board meetings, the annual general meeting in 2019 as well as the strategic committee and board retreat meeting. CITIC Limited considered that he has given sufficient time and attention to CITIC Limited’s affairs as an independent non-executive director.

Board composition and changes

CITIC Limited announced the following changes in board composition.

On 29 January 2019, Mr Wu Youguang resigned as a non-executive director of CITIC Limited.

On 21 February 2019, Mr Pu Jian resigned as an executive director, vice president, a member of the executive committee and vice chairman of the strategy and investment management committee of CITIC Limited.

On 28 March 2019, Ms Lee Boo Jin resigned as an independent non-executive director and a member of the nomination committee of CITIC Limited. On the same day, Mr Gregory Lynn Curl was appointed as an independent non-executive director and a member of the nomination committee of CITIC Limited. The appointment of Mr Curl as director was recommended by the nomination committee.

On 30 March 2020, Mr Chang Zhenming resigned as chairman of the board and executive director, chairman of nomination committee, chairman of strategic committee and chairman of executive committee of CITIC Limited. On the same day, Mr Zhu Hexin was appointed as chairman of the board and executive director, chairman of nomination committee, chairman of strategic committee and chairman of executive committee of CITIC Limited. The appointment of Mr Zhu as director was recommended by the nomination committee.

At the annual general meeting of CITIC Limited held on 5 June 2019, Mr Paul Chow Man Yiu retired as an independent non-executive director of CITIC Limited by rotation and did not offer himself for re-election. Following his retirement, he ceased to act as a member of the remuneration committee of CITIC Limited.

The board currently has 14 directors, comprising three executive directors, six non-executive directors and five independent non-executive directors. Non-executive directors (including independent non-executive directors) comprise almost four-fifths of the board, of which independent non-executive directors satisfy the Listing Rules requirement of representing at least one-third of the board. CITIC Limited believes that the board has a balance of skills, experience and diversity of perspectives appropriate to the requirements of CITIC Limited’s business.

In relation to the six non-executive directors who are not independent (as considered by The Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange”), Mr Song Kangle, Ms Yan Shuqin, Mr Liu Zhuyu and Mr Peng Yanxiang are all non-executive directors of CITIC Group Corporation (the controlling shareholder of CITIC Limited) whilst Mr Liu Zhongyuan holds an executive position in the National Council for Social Security Fund (a shareholder of CITIC Limited) and Mr Yang Xiaoping is the senior vice chairman of the Charoen Pokphand Group.

CITIC Limited has received from each independent non-executive director a confirmation of his independence and considers that all independent non-executive directors are independent in accordance with the independence guidelines set out in Rule 3.13 of the Listing Rules. Brief biographical particulars of the directors, together with information about the relationships amongst them, are set out here.

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 CITIC Limited. Pursuant to Article 104(A) of CITIC Limited’s articles of association, every director, including the non-executive directors, shall be subject to retirement by rotation at least once every three years. 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. 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 and his/her re-election is subject to a vote of shareholders.

Pursuant to Article 95 of the articles of association of CITIC Limited, any director appointed by the board subsequent to the last annual general meeting either to fill a casual vacancy or as an additional director shall hold office only until the next following annual general meeting, or if earlier, the next following extraordinary general meeting of CITIC Limited and shall then be eligible for re-election at such meeting. Thereafter, they shall be subject to retirement by rotation and re-election in accordance with CITIC Limited’s articles of association. Induction materials will be provided to the newly appointed directors upon their appointment.

Board responsibilities and delegation

The board collectively determines the overall strategies of CITIC Limited, monitors performance and the related risks and controls in pursuit of the strategic objectives of CITIC Limited. Day-to-day operation and management powers are delegated to the executive committee which reports 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 CITIC Limited, including reports and recommendations on significant matters. All board members are provided with monthly management updates on the latest development of CITIC Limited’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 is also responsible for CITIC Limited’s risk management and internal control systems and reviewing their effectiveness. The audit and risk management committee which acts on behalf of the board conducts a review of the effectiveness of the risk management and internal control systems annually and reports to the board on such review. Details are set out in the section below headed “Risk management and internal control”.

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, changes to appointments such as directors, 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.

CITIC Limited has arranged Directors & Officers Liability and Company Reimbursement Insurance for its directors and officers.

Details of the responsibilities, membership, attendance and activities during the year under review of each board committee are set out here.

Board meetings and attendance

The board meets regularly to review the financial and operating performance of CITIC Limited and to discuss future strategy. Four regular board meetings were held in 2019. At the board meetings, the board reviewed significant matters including CITIC Limited’s annual and half-year financial statements, annual budget, proposals for final and interim dividends, annual report and half-year report, and any notifiable transactions, connected transactions and continuing connected transactions. At each of the regular board meetings, the board received a written report from the president on CITIC Limited’s major businesses, investments and projects, and corporate activities.

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 secretariat office. Copies are provided to directors and the original minutes are available to all directors for inspection. During the year under review, in addition to the board meetings, the chairman also met with the independent non-executive directors without the presence of executive directors and non- executive directors.

One special board meeting was held in February 2020 to approve a connected transaction. Detailed information of the transaction was provided and relevant directors abstained from voting as required under the Listing Rules.

The attendance record of each director at board meetings and general meeting in 2019 and special board meeting in February 2020 is set out below:

Chairman and the president

Mr Chang Zhenming served as the chairman of CITIC Limited until 29 March 2020 and Mr Zhu Hexin was appointed in his stead with effect from 30 March 2020. Mr Wang Jiong is the president of CITIC Limited. 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 CITIC Limited. The president is responsible for the day-to-day management of CITIC Limited 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.

Directors’ continuous professional development programme

CITIC Limited has a continuous professional development programme (“CPD Programme”) for directors with an aim to improve their general understanding of CITIC Limited’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.

In addition, each newly appointed director is provided with a package comprising comprehensive 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 CITIC Limited to ensure that he/she has a proper understanding of his/her responsibilities under the relevant laws, rules and regulations. During the year under review and up to the date of this report, two directors were appointed. CITIC Limited has arranged for briefing given by external legal counsel to the new director.

Under the CPD Programme of CITIC Limited for the year 2019, directors were provided with the monthly business updates and other reading materials concerning the latest developments in corporate governance practices and relevant legal and regulatory developments. Further, CITIC Limited has forwarded e-training courses launched by the Hong Kong Stock Exchange to the directors to help them to develop and refresh their knowledge and skills so as to ensure that their contribution to the board remains informed and relevant. Directors also attended the strategic committee and board retreat meeting held in November 2019 to discuss the corporate strategy and business development of CITIC Limited.

According to the record of the directors’ participation in CITIC Limited’s CPD Programme kept at the company secretariat office, a summary of training received by the directors for the period from 1 January 2019 to 31 December 2019 is as follows: