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.

Board composition and changes

CITIC Limited announced the following changes in board composition.

On 4 January 2022, Mr Zhang Lin was appointed as a non-executive director and a member of the remuneration committee of CITIC Limited and Mr Tang Jiang was appointed as a non-executive director of CITIC Limited.

On 21 October 2022, Ms Li Qingping resigned as an executive director, vice president and a member of the executive committee of CITIC Limited.

On 30 November 2022, Mr Song Kangle resigned as a non-executive director and a member of the strategic committee of CITIC Limited, and Mr Peng Yanxiang resigned as a non-executive director and a member of the audit and risk management committee of CITIC Limited. On the same day, Ms Li Yi was appointed as a non-executive director and a member of the strategic committee of CITIC Limited.

On 9 January 2023, Mr Yue Xuekun was appointed as a non-executive director of CITIC Limited.

On 15 March 2023, Mr Liu Zhengjun and Mr Wang Guoquan were appointed as executive directors of CITIC Limited.

On 26 March 2023, Mr Tang Jiang, a non-executive director of CITIC Limited, passed away.

The appointment of the above directors were recommended by the nomination committee.

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-thirds of the board, of which independent non-executive directors satisfy the Listing Rules requirement of representing 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 five non-executive directors who are not independent (as considered by The Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange”)), Ms Yu Yang, Mr Zhang Lin, Ms Li Yi and Mr Yue Xuekun are all non-executive directors of CITIC Group Corporation (the controlling shareholder of CITIC Limited) whilst Mr Yang Xiaoping is the senior vice chairman of CP Group.

Pursuant to the code provision of the CG Code, every director, including those appointed for a specific term, should be subject to retirement by rotation at least once every three years. The requirement under this code provision is clearly stipulated in Article 104(A) of CITIC Limited’s articles of association. All directors, including the non-executive directors, shall hold office for not more than three years since his/her re-election by shareholders at the general meeting. In accordance with Article 95 of CITIC Limited’s articles of association, 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. With a view of enhancing a culture of good corporate governance, starting from the annual general meeting in 2023, all directors of CITIC Limited shall retire from office at each annual general meeting. All 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. Each director has entered into an appointment letter with CITIC Limited. Induction materials will be provided to the newly appointed directors upon their appointment.

Brief bio data of the directors, together with information about the relationship amongst them, are set out here.

Board Independence

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.

The board, when it considers necessary, has the right to seek advice from independent professionals at the CITIC Limited’s expense in order to facilitate proper discharge of their duties and responsibilities. Besides, the chairman meets with the independent non-executive directors in a separate meeting without the presence of executive directors and non-executive directors once a year. At every board meeting, the chairman encourages all directors including the independent non-executive directors to express their views in an open and candid manner. Any director who holds interest as a connected person or has a material interest in the connected transaction will abstain from voting on the board resolutions to approve the connected transaction, i.e. only independent directors shall give their views/opinions and approve the transactions if they agree to the terms and conditions of the transactions. Independent non-executive directors bring a wide range and balance of skills and international business experience and through their contribution to the board meetings and board committee meetings, they can give their opinions on the proposals, strategies and bring independent judgement on issues of business performance and risk.

At the end of every year, the board performs a self-evaluation of its performance and reviews each director’s contribution and their time commitment to the board. The performance and time contribution of the independent non-executive directors are assessed annually as part of the board’s performance self-evaluation. Independence of independent non-executive directors is assessed upon appointment and annually to ensure that they remain independent and are able to provide independent, balanced and impartial views to the board.

The board reviewed and considered that the features and mechanisms described above are effective in ensuring that independent views and input are provided to the board.

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 is committed to overseeing the content of the Environmental, Social and Governance Report (the “ESG Report”) as contained in this annual report. Details of the board’s overall responsibility for ESG strategy and reporting are set out in the ESG Report.

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 corporate policies such as the board diversity policy and shareholders’ communication 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 2022. 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 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.

The attendance record of each director at board meetings and general meeting in 2022 is set out below:

Chairman and the president

Mr Zhu Hexin serves as the chairman of CITIC Limited. Mr Xi Guohua 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, six directors were appointed. CITIC Limited has arranged for briefings given by external legal counsel to the new directors.

Under the CPD Programme of CITIC Limited for the year 2022, 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.

Directors also attended the strategic committee and board retreat meeting held in November 2022 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 2022 to 31 December 2022 is as follows: