Corporate Governance Practices
CITIC Limited is committed to maintaining high standards of corporate governance. The board of directors believes that good corporate governance practices are important to promote investor confidence and protect the interests of our shareholders. We attach importance to our people, our code of conduct, and our corporate policies and standards, which together form the basis of our governance practices. We respect and are committed to comply with the laws, rules and regulations of each country and area in which we operate, and we strive to ensure for our people a healthy and safe working environment which is our paramount concern. We endeavour to contribute to the sustainable development of CITIC Limited, with particular focus on our accountability to shareholders and stakeholders. This report describes how CITIC Limited has applied its corporate governance practices to its everyday activities.
CITIC Limited has applied the principles and complied throughout the year ended 31 December 2023 with all applicable code provisions of the Corporate Governance Code (the “CG Code”) contained in Appendix C1 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”), with the exception of code provisions C.2.1 (separate roles of the chairman and the president) and C.2.7 (meeting of the chairman with the independent non-executive directors without the presence of other directors), as further elucidated below.
Looking ahead, we will keep our governance practices under continual review to ensure their consistent application and will continue to improve our practices having regard to the latest developments.
CITIC Limited is one of China’s largest conglomerates and a constituent of the Hang Seng Index. CITIC has built a remarkable portfolio of businesses and our platform is unique in its diversity and scale, allowing CITIC to capture emerging opportunities in China and around the world.
To better prepare for continued change and uncertainty, China is accelerating its dual circulation economic strategy, which prioritises the development of a dominant domestic economy supplemented by international trade. In alignment with China’s 14th Five-Year Plan, and to adapt to the increasingly complex operating environment, CITIC has announced an updated strategic vision to build a lasting enterprise and solidify the CITIC brand’s strong market position. CITIC has also outlined an updated development strategy focused on comprehensive financial services, advanced intelligent manufacturing, advanced materials, new consumption and new-type urbanisation. These five segments will be matrixed with five platforms: the financial, industrial, capital investment, capital operations and strategic investment platforms. We will leverage integration, collaboration and expansion to build a lasting enterprise and solidify the CITIC brand’s positioning as a leader in the fields in which we operate.
The comprehensive financial services segment will establish a financial holding company with global influence and high competitiveness to become an international leader in the integrated financial services space.
We will also strive to become a pioneer in the advanced intelligent manufacturing sector, with the aim of achieving operational breakthroughs in critical technologies and reinforcing our leading market position in China.
The goal of our advanced materials segment is to ensure supply chain stability. This segment will improve environmental protection efficiency in traditional fields, fill the gaps in emerging industries and maintain the stability of the industrial chain and supply chain to ensure national resources security.
Our new consumption segment strives to be a trendsetter in the consumer market. In response to the consumption upgrade trend, this segment leverages new technologies to promote industrial development, technological breakthroughs and efficiency improvements that contribute to China’s cultural development, revitalisation of the seed industry and the creation of a “digital China”.
In the new-type urbanisation segment, we have positioned ourselves as a builder of smart cities. With our people-oriented mindset, we can provide smart-city solutions with integrated capabilities in planning, design, investment and financing, construction, development and operation.
In 2023, we remain committed to the country’s long-term development objectives in our quest to become a world-class enterprise. Focusing on three fundamental questions – who is the competition, on what basis should we compete and how to outcompete – we have defined goals for each stage of growth, with a long-term view and holistic perspective, in the spirit of reform. We believe this approach will enable our development to progress at a steady pace. In the years ahead, we will take “honesty and trustworthiness, to seek interest without compromising moral principles, to be prudent and cautious in work, to uphold fundamental principles and break new ground, to be compliant with law and regulations” as the fundamental guidance of corporate culture construction, continue to emphasise the CITIC-Style as well as our values of Honesty, Innovation, Cohesion, Harmony, Dedication and Excellence. We look forward to an exciting chapter of high-quality development, with a focus on creating value and prosperity for society and sustainable returns for our shareholders.
The board plays a leading role in defining the purpose, values and strategic direction of the Group and in fostering a culture that is forward looking, change embracing and competitiveness focused. Further, the board has taken up the roles such as reviewing the progress report on business operations and key projects/developments of CITIC Limited at each regular board meeting; promoting the long-term sustainable success of CITIC Limited so as to enhance the shareholders’ value; ensuring ongoing effective communication with shareholders and engagement with key shareholders for developing the purpose and value of CITIC Limited. A strategic committee has been established to consider the strategic development of CITIC Limited. At the strategic committee and board retreat meeting held each year, the board discussed about CITIC Limited’s strategic development, business plan and corporate governance taking into account the internal and external changing environment. These discussions allow the board members to share their insights on the culture of CITIC Limited and raise awareness of shareholders perspectives which in turn support the board to create greater alignment between culture and strategy of CITIC Limited.
Taking into account the corporate culture in a range of contexts, the board considers that the culture and the purpose, value and strategy of CITIC Limited are aligned.
CITIC Limited has applied the principles and complied throughout the year ended 31 December 2023 with all applicable code provisions of the Corporate Governance Code (the “CG Code”) contained in Appendix C1 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”), with the exception of code provisions C.2.1 (separate roles of the chairman and the president) and C.2.7 (meeting of the chairman with the independent non-executive directors without the presence of other directors), as further elucidated below.
Looking ahead, we will keep our governance practices under continual review to ensure their consistent application and will continue to improve our practices having regard to the latest developments.
Corporate Strategy, Business Model and Culture
CITIC Limited is one of China’s largest conglomerates and a constituent of the Hang Seng Index. CITIC has built a remarkable portfolio of businesses and our platform is unique in its diversity and scale, allowing CITIC to capture emerging opportunities in China and around the world.
To better prepare for continued change and uncertainty, China is accelerating its dual circulation economic strategy, which prioritises the development of a dominant domestic economy supplemented by international trade. In alignment with China’s 14th Five-Year Plan, and to adapt to the increasingly complex operating environment, CITIC has announced an updated strategic vision to build a lasting enterprise and solidify the CITIC brand’s strong market position. CITIC has also outlined an updated development strategy focused on comprehensive financial services, advanced intelligent manufacturing, advanced materials, new consumption and new-type urbanisation. These five segments will be matrixed with five platforms: the financial, industrial, capital investment, capital operations and strategic investment platforms. We will leverage integration, collaboration and expansion to build a lasting enterprise and solidify the CITIC brand’s positioning as a leader in the fields in which we operate.
The comprehensive financial services segment will establish a financial holding company with global influence and high competitiveness to become an international leader in the integrated financial services space.
We will also strive to become a pioneer in the advanced intelligent manufacturing sector, with the aim of achieving operational breakthroughs in critical technologies and reinforcing our leading market position in China.
The goal of our advanced materials segment is to ensure supply chain stability. This segment will improve environmental protection efficiency in traditional fields, fill the gaps in emerging industries and maintain the stability of the industrial chain and supply chain to ensure national resources security.
Our new consumption segment strives to be a trendsetter in the consumer market. In response to the consumption upgrade trend, this segment leverages new technologies to promote industrial development, technological breakthroughs and efficiency improvements that contribute to China’s cultural development, revitalisation of the seed industry and the creation of a “digital China”.
In the new-type urbanisation segment, we have positioned ourselves as a builder of smart cities. With our people-oriented mindset, we can provide smart-city solutions with integrated capabilities in planning, design, investment and financing, construction, development and operation.
In 2023, we remain committed to the country’s long-term development objectives in our quest to become a world-class enterprise. Focusing on three fundamental questions – who is the competition, on what basis should we compete and how to outcompete – we have defined goals for each stage of growth, with a long-term view and holistic perspective, in the spirit of reform. We believe this approach will enable our development to progress at a steady pace. In the years ahead, we will take “honesty and trustworthiness, to seek interest without compromising moral principles, to be prudent and cautious in work, to uphold fundamental principles and break new ground, to be compliant with law and regulations” as the fundamental guidance of corporate culture construction, continue to emphasise the CITIC-Style as well as our values of Honesty, Innovation, Cohesion, Harmony, Dedication and Excellence. We look forward to an exciting chapter of high-quality development, with a focus on creating value and prosperity for society and sustainable returns for our shareholders.
BOARD’S ROLE
The board plays a leading role in defining the purpose, values and strategic direction of the Group and in fostering a culture that is forward looking, change embracing and competitiveness focused. Further, the board has taken up the roles such as reviewing the progress report on business operations and key projects/developments of CITIC Limited at each regular board meeting; promoting the long-term sustainable success of CITIC Limited so as to enhance the shareholders’ value; ensuring ongoing effective communication with shareholders and engagement with key shareholders for developing the purpose and value of CITIC Limited. A strategic committee has been established to consider the strategic development of CITIC Limited. At the strategic committee and board retreat meeting held each year, the board discussed about CITIC Limited’s strategic development, business plan and corporate governance taking into account the internal and external changing environment. These discussions allow the board members to share their insights on the culture of CITIC Limited and raise awareness of shareholders perspectives which in turn support the board to create greater alignment between culture and strategy of CITIC Limited.
Taking into account the corporate culture in a range of contexts, the board considers that the culture and the purpose, value and strategy of CITIC Limited are aligned.