Huawei Technologies Co., Ltd. (the "Company"or "Huawei") is a wholly-owned subsidiary of Shenzhen Huawei Investment & Holding Co., Ltd. ("Huawei Holding"). Huawei Holding is solely owned by employees of the Company, without any third parties, including the government bodies, holding any of its shares.
Huawei Holding implements an Employee Shareholding Scheme (the "Scheme") through the Union, which involves 65,179 employees as of 31 December 2010. They are represented by and exercise their rights through the elected representatives. The Scheme effectively aligns the personal goals of employees with the Company's long-term development, fostering the continuing success of Huawei.
Board of Directors and Committees
The Board guides and oversees the overall business operations, and makes decisions on significant issues in strategic and operational areas. The Board of Directors has established the Human Resources Committee, the Finance Committee and the Audit Committee to assist the Board in overseeing the Company's operations.
The key roles and responsibilities of Board of Directors include:
- Approving the Company's strategic directions and its medium-to-long-term business plan, and monitor their execution
- Approving the Company's major financial arrangements and business transactions
- Approving the Company's operational and financial results
- Establishing and reviewing the governance structure in accordance with the development of the Company and changes in the operating environment
- Overseeing the establishment and maintenance of the Company's monitoring mechanism
- Providing advice and guidance to management regarding significant issues encountered, including major market changes and risks
- Approving the appointment and remuneration of the Chief Executive Officer; establishing the succession plans for the Chief Executive Officer and other senior management
- Approving the appointment of senior management and their remuneration policy and performance evaluations
In 2010, the Board of Directors deliberated on the future governance and business structure of the Company, and set out plans for the formulation of the Company's management outlines. The annual business plan and budget, the quarterly operational performance, the strategic direction and organizational setup for new businesses, investment and merger & acquisition projects, the appointment and remuneration of senior management, and other key human resources and financial policies were also reviewed and approved by the Board. The Board also concluded a set of resolutions on the Company's strategic directions, major investment decisions, financing arrangements and major contracts.
Human Resources Committee
The Human Resources Committee comprises Board members and senior human resources experts. The key roles and responsibilities of the Human Resources Committee include:
- Evaluating the corporate strategy and policies on human resources
- Reviewing the Company's medium to long-term human resources plan and annual human resources programs
- Reviewing the selection, allocation, performance evaluation, remuneration, incentive & discipline as well as succession plan of the Company's middle and senior management
The Human Resources Committee meets on a monthly basis. Business executives and relevant experts are invited as non-voting participants when needed. Based on business needs and requests of the Board of Directors, the Human Resources Committee held twelve meetings in 2010 to develop frameworks and policies, as well as to monitor executions regarding cadres management & succession plan, compensation & incentive optimization, organization development and performance improvement of human resources system.
The Finance Committee consists of members with relevant expertise and experience, including Directors and financial experts. The key roles and responsibilities of the Finance Committee include:
- Reviewing the Company's medium-to-long-term business plan, overseeing and managing the Company's annual budget and business forecast through quarterly reviews and monthly reviews, and driving special actions on critical results of operations
- Reviewing all the finance-related strategies, plans, policies and campaigns, and submitting such for the Board's approvals, including capital and asset structures, asset and debt financing, strategic investments, major financial investments, mergers & acquisitions, and divestitures etc
- Monitoring the Company's operational and financial results and ensuring integrity and accuracy of financial information
The Finance Committee generally holds meetings on a monthly basis, and may call for special sessions and invite relevant functional experts to attend if needed. Based on business needs and requests of the Board of Directors, the Finance Committee held eleven meetings in 2010, and focused its efforts in the structural design, approval procedure, execution, and monitoring of the Company's strategic plan (SP) and business plan (BP), operational management, capital investment projects, capital structure, operating assets management, enterprise risk management, subsidiaries and joint ventures management etc. The Finance Committee also approved and issued relevant policies and guidelines for the above matters.
The Audit Committee comprises Directors and the Chief Internal Auditor. The key roles and responsibilities of the Audit Committee include:
- Reviewing the Company's internal audit plan, monitoring its execution results, discussing the Company's internal control policies
- Approving the internal control framework and milestone plan, overseeing the implementation of internal control improvement measures and driving special actions on key issues
- Monitoring management's and employees' integrity and the Company's compliance with rules and regulations
- Approving the appointment of independent auditor together with the Board of Directors, and evaluating the performance of the independent auditor
The Audit Committee holds meetings on a quarterly basis. Four meetings were held in 2010 to review the Company's risk management and internal control strategies, and to approve the annual internal audit plan. In addition, the Audit Committee monitored the Company's internal control effectiveness through reviewing regular reports, such as the Audit Trend Report, the Semi-annual Control Assessment (SACA) and the GPO Internal Control Reports, submitted by the Internal Audit Department and Global Process Owners (GPO). The Audit Committee also promoted the compliance of the Business Conduct Guideline (BCG) among all employees through sharing of major audit findings and non-compliance cases. During the year, the Audit Committee also discussed the management letter with the independent auditor.
Pursuant to the requirements of the Company Law of the People's Republic of China, Huawei has established a Supervisory Board, which consists of five members who are elected by the shareholders. The key roles and responsibilities of the Supervisory Board include overseeing the Company's financial and operational results, monitoring the performance of the Directors, Chief Executive Officer and other senior management, as well as attending Board meetings as observers.