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 and board committees composition.

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.

On 26 October 2023, Mr Mu Guoxin was appointed as a non-executive director of CITIC Limited.

On 1 December 2023, Mr Zhang Lin, a non-executive director of CITIC Limited, was appointed as a member of the audit and risk management committee of CITIC Limited.

On 13 December 2023, Mr Zhu Hexin 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 29 December 2023, Mr Li Zimin was appointed as a non-executive director of CITIC Limited.

On 29 January 2024, Mr Xi Guohua was appointed as chairman of the board, chairman of nomination committee, chairman of strategic committee and chairman of executive committee of CITIC Limited and ceased to be vice chairman and president of CITIC Limited.

On 28 March 2024, Mr Zhang Wenwu was appointed as executive director, vice chairman and president, a member of the nomination committee, a member of strategic committee and vice chairman of executive committee of CITIC Limited.

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

Mr Zhang Wenwu has obtained the legal advice referred to in Rule 3.09D of the Listing Rules on 25 March 2024, and has confirmed that he understood his obligations as a director of the Company.

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.

Following the appointment of Mr Zhang Wenwu as an executive director of CITIC Limited, the board comprises 16 members consisting of four executive directors, seven non-executive directors and five independent non-executive directors. As a result, the number of independent non-executive directors falls below the requirement of having at least one-third of the board members required under Rule 3.10A of the Listing Rules. CITIC Limited will identify a suitable candidate to act as an independent non-executive director as soon as practicable within three months from the effective date of appointment of Mr Zhang Wenwu as required by Rule 3.11 of the Listing Rules. Further announcement will be made as and when appropriate.

In relation to the seven 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, Mr Mu Guoxin is the appointed director and supervisor of the National Council for Social Security Fund, PRC (a shareholder of CITIC Limited) and Mr Li Zimin is an executive director and president of China CITIC Financial Asset Management Co., Ltd. (formerly China Huarong Asset Management Co., Ltd. (a shareholder of CITIC Limited)).

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, all directors of CITIC Limited shall retire voluntarily 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 are provided to the newly appointed directors upon their appointment.

CITIC Limited maintains on its website and on Hong Kong Exchanges and Clearing Limited’s (“HKEX”) website an updated list of directors identifying their roles and functions and whether they are independent non-executive directors. The bio data of the current directors together with, if any, information about the relationship (including financial, business, family or other material relationship) amongst the directors, are set out on the “ Board Of Directors ” and on the website of CITIC Limited.

Board Independence

The independent non-executive directors of CITIC Limited have the required integrity and experience in bringing to the board independent advice and judgement. The majority of members of all governance related committees are independent non-executive directors.

Each independent non-executive director has given written confirmation to CITIC Limited of his independence as regards all the factors set out in Rule 3.13 of the Listing Rules. CITIC Limited is satisfied with the independence of each independent non-executive director and still considers that all independent non-executive directors are independent.

The board, when it considers necessary, has the right to seek advice from independent professionals at CITIC Limited’s expense in order to facilitate proper discharge of their duties and responsibilities. Besides, the chairman shall meet 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 whether they agree to the terms and conditions of the transactions. Independent non-executive directors bring a wide range and balance of skills as well as international business experience and, through their contribution to the board meetings and board committee meetings, 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 Environmental, Social and Governance (“ESG”) matters. Details of the board’s overall responsibility for ESG-related strategy, performance and reporting are set out in the standalone ESG Report which is published on the same date of this annual report and available on the websites of both HKEX and CITIC Limited.

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 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 on 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 2023. 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, discloseable transactions, connected transaction and continuing connected transactions. At each regular board meeting, 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.

As a usual practice, the meeting between the chairman and independent non-executive directors without the presence of other directors is scheduled to be held before the end of each year. On 13 December 2023, Mr Zhu Hexin resigned as the chairman of CITIC Limited and the originally planned meeting with the independent non-executive directors could not be held during the year under review. This is at variance with code provision C.2.7 of the CG Code. However, CITIC Limited is of the view that as the independent non-executive directors had the opportunity to communicate and share their views in every board meeting during the year under review, there were sufficient channels and communication between the chairman and the independent non-executive directors for discussion on any matters relating to CITIC Limited. The new chairman Mr Xi Guohua will meet with the independent non-executive directors without the presence of other directors in the upcoming months.

The attendance record of each director at board meetings and general meeting in 2023 is set out below:

Notes:

• appointed as chairman and ceased to be vice chairman and president with effect from 29 January 2024
• appointed as executive director with effect from 15 March 2023
• appointed as non-executive director with effect from 9 January 2023
• appointed as non-executive director with effect from 26 October 2023
• appointed as non-executive director with effect from 29 December 2023
• resigned as chairman and executive director with effect from 13 December 2023
• passed away on 26 March 2023

Chairman and the president

Mr Zhu Hexin served as the chairman of the board until his resignation on 13 December 2023. During his term as the chairman, Mr Zhu was responsible for leadership and effective functioning of the board, ensuring key issues were promptly addressed by the board, as well as providing strategic direction for CITIC Limited. After Mr Zhu’s resignation, Mr Xi Guohua, the vice chairman and president, assumed the roles and duties of the chairman to ensure that the board works effectively and CITIC Limited runs smoothly as well as the responsibilities of the president for the day-to-day management of CITIC Limited and the effective implementation of corporate strategy and policies. Mr Xi was appointed as the chairman of the board with effect from 29 January 2024 and concurrently ceased to be the vice chairman and president. In the interim, Mr Xi continued to take on the daily operation and management of CITIC Limited until the new president is appointed. The above arrangement was capable of facilitating CITIC Limited to make and implement decisions promptly and allowing CITIC Limited to achieve its objectives efficiently and effectively in response to the changing environment. On 28 March 2024, Mr Zhang Wenwu was appointed as vice chairman and president of CITIC Limited. Since then, the chairman and the president have separate defined responsibilities. 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 while the president is responsible for the day-to-day management of CITIC Limited and the effective implementation of corporate strategy and policies.

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/legal advice given by external legal counsel to the new directors on Hong Kong law and Listing Rules requirements regarding continuing obligations of a Hong Kong listed company and its directors.

Under the CPD Programme of CITIC Limited for the year 2023, 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, four non-executive directors attended “The 70th Governance Professionals ECPD seminars” in Dalian organised by The Hong Kong Chartered Governance Institute. Directors also attended the strategic committee and board retreat meeting held in November 2023 to discuss the corporate strategy and business development of CITIC Limited. Directors also made site visits to projects and subsidiaries of CITIC Limited in Shanghai in November 2023 arranged by 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 2023 to 31 December 2023 is as follows: