Vue d'ensemble de la gouvernance corporate

Board of Directors

The Board of Directors (BOD) is the highest body responsible for corporate strategy, operations management, and customer satisfaction. The BOD's mission is to lead the company forward. It exercises decision-making authority for corporate strategy and operations management, and ensures customer and shareholder interests are protected.

The main responsibilities of the BOD are to:

• Develop proposals for corporate governance.
• Review proposals to increase or decrease the company's registered capital, as well as proposals related to profit distribution and loss recovery.
• Review the company's stock options plan and other long-term incentive plans.
• Review or approve the company's plans for entering and exiting different industry sectors, and approve the company's strategic plan.
• Approve major organizational restructuring, management system development, and business transformation.
• Approve major financial policies, financial plans, and business transactions.
• Approve the company's annual budget proposal, annual operations report, and annual audit report.
• Approve the appointment/removal, compensation, and long-term incentives of senior management.
• Approve major HR policies and plans at the corporate level.
• Approve proposals for managing major risks and crises, and manage major emergencies.
• Approve the development of internal controls and compliance systems.

In 2022, the BOD held 11 meetings. At the meetings, the BOD reviewed and approved matters such as the company's medium-to-long-term strategic plan, as well as the company's annual business plan, audit report, profit distribution, and capital increases.

The BOD has 17 members, who are elected by the Commission and then voted in by the Shareholders' Meeting. In March 2023, a new BOD was elected, resulting in a new set of regular and alternate directors. The BOD elected deputy chairs and executive directors, and determined the directors who will attend BOD Executive Committee meetings as non-voting attendees.

Members of the current BOD are as follows:

• Chairman: Mr. Liang Hua
• Deputy Chairs/Rotating Chairs: Mr. Xu Zhijun, Mr. Hu Houkun, and Ms. Meng Wanzhou
• Executive directors: Mr. Wang Tao, Mr. Zhang Ping'an, Mr. Yu Chengdong, and Mr. Li Jianguo
• Directors who will attend BOD Executive Committee meetings as non-voting attendees: Ms. He Tingbo and Mr. Zheng Liangcai
• Directors: Mr. Ren Zhengfei, Mr. Tao Jingwen, Mr. Peng Bo, Mr. Zha Jun, Mr. Hou Jinlong, Mr. Yang Chaobin, and Mr. Ying Weimin

In the event that there is a vacancy in the BOD, alternate directors will take up the vacancy in a predetermined sequence. Alternate directors are Mr. He Gang, Mr. Bai Yi, Mr. Cao Jibin, Mr. Zhou Hong, Mr. Bian Honglin, Mr. Jin Yuzhi, Mr. Lu Yong, Mr. Zou Zhilei, Mr. Jiang Yafei, Mr. Hu Kewen, and Mr. Wang Huanan.

The BOD has established the Executive Committee, which acts as the standing executive body of the BOD. Entrusted by the BOD, the Executive Committee examines and reflects on major issues within the company, decides on issues authorized by the BOD, and oversees their execution. In 2022, the BOD Executive Committee held 18 meetings.

Members of the current BOD Executive Committee are Mr. Xu Zhijun, Mr. Hu Houkun, Ms. Meng Wanzhou, Mr. Wang Tao, Mr. Zhang Ping'an, Mr. Yu Chengdong, and Mr. Li Jianguo.

The BOD and its Executive Committee are led by rotating chairs. During their term, each rotating chair serves as the foremost leader of the company. The term of each rotating chair lasts six months.

Supervisory Board

As Huawei's highest oversight body, the Supervisory Board exercises the authority of oversight on behalf of the company's shareholders. The Supervisory Board is responsible for the company's survival, development, and long-term prospects. Its core authorities are reflected in leader management, business reviews, and strategic vision. Through the observation of managers and cultivation of managerial candidates, the Supervisory Board promotes the development of leadership pipelines, aiming to ensure that the company has qualified successors. By establishing a rule-based, systematic oversight framework, the Supervisory Board comprehensively oversees matters such as the responsibility fulfillment of BOD directors and other executives, the company's operating and financial status, and compliance and internal control systems, gradually guiding the company to change from experience-based management to rule-based management and enabling businesses to operate freely within preset boundaries.

In 2022, the Supervisory Board improved its basic institutions and organization, observed managers, managed the resource pool of managerial candidates, inspected and examined major areas with potential risks, oversaw the company's operations management, and guided and managed the development of subsidiary boards. In 2022, the Supervisory Board held 12 meetings, and its members attended all BOD meetings as non-voting participants, overseeing the legitimacy of BOD decisions and operations, and overseeing and assessing the responsibility fulfillment of BOD members and other executives.

The Supervisory Board has 15 members, who are elected by the Commission and then voted in by the Shareholders' Meeting. On March 29, 2022, a new Supervisory Board was elected, resulting in a new set of regular and alternate members.

Members of the new Supervisory Board are as follows:

• Chairman: Mr. Guo Ping
• Deputy Chairman: Mr. Li Jie
• Executive members: Ms. Chen Lifang, Mr. Yao Fuhai, Mr. Li Dafeng, Mr. Li Yingtao, and Mr. Ma Qingqing
• Members: Mr. Song Liuping, Mr. Ren Shulu, Mr. Tian Feng, Mr. Peng Zhongyang, Ms. Shi Yanli, Ms. Yang Li, Mr. Lyu Ke, and Mr. Li Peng

In the event that there is a vacancy in the Supervisory Board, its alternate members will take up the vacancy in a predetermined sequence. Currently, the Supervisory Board has four alternate members: Mr. Wei Chengmin, Mr. Xu Qinsong, Mr. Wu Qinming, and Mr. Gao Ji.

The Supervisory Board has established the Executive Committee, which acts as the standing executive body of the Supervisory Board. Entrusted by the Supervisory Board, the Executive Committee examines and reflects on major issues within the company, decides on issues authorized by the Supervisory Board, and oversees their execution. In 2022, the Executive Committee of the Supervisory Board held 20 meetings.

Members of the Executive Committee of the Supervisory Board are Mr. Guo Ping, Mr. Li Jie, Ms. Chen Lifang, Mr. Yao Fuhai, Mr. Li Dafeng, Mr. Li Yingtao, and Mr. Ma Qingqing.

The Shareholders' Meeting and the Representatives' Commission

The Shareholders' Meeting, the company's authoritative body, comprises two shareholders: the Union and Mr. Ren Zhengfei.

The Representatives' Commission (the "Commission") is the organization through which the Union fulfills shareholder responsibilities and exercises shareholder rights. The Commission consists of no more than 115 representatives of shareholding employees ("Representatives") and exercises rights on behalf of all shareholding employees. In 2022, the Commission held one meeting. At the meeting, a new Supervisory Board was elected, resulting in a new set of regular and alternate members. The Commission also reviewed and approved the report from the Board of Directors on the company's financial and operating results, the work report from the Supervisory Board, and proposals for matters such as annual profit distribution and annual capital increases.

The Representatives and Alternate Representatives are elected by the shareholding employees with voting rights, and serve for a term of five years. In the event that there is a vacancy in the Commission, the Alternate Representatives shall take up the vacancy in a predetermined sequence.

The shareholding employees with voting rights elect the Commission on a one-vote-per-share basis, after which the Commission elects the company's Board of Directors and Supervisory Board on a one-vote-per-person basis. The Commission, along with the Board of Directors and Supervisory Board, decides on, manages, and monitors major company matters.

Members of the current Commission are:

Mr. Ren Zhengfei, Ms. Sun Yafang, Mr. Liang Hua, Mr. Guo Ping, Mr. Xu Zhijun, Mr. Hu Houkun, Ms. Meng Wanzhou, Mr. Yu Chengdong, Mr. Wang Tao, Mr. Xu Wenwei, Ms. Chen Lifang, Mr. Peng Zhongyang, Ms. He Tingbo, Mr. Li Yingtao, Mr. Yao Fuhai, Mr. Tao Jingwen, Mr. Yan Lida, Mr. Li Jie, Mr. Ren Shulu, Mr. Li Dafeng, Mr. Song Liuping, Mr. Tian Feng, Mr. Yi Xiang, Mr. Li Jianguo, Mr. Peng Bo, Ms. Zhao Minglu, Ms. Shi Yanli, Ms. Zhang Xiaoqing, Mr. Yang Shubin, Mr. Zou Zhilei, Mr. Lu Yong, Mr. Peng Song, Mr. Yang Yougui, Mr. Li Peng, Mr. Cao Jibin, Mr. Wu Weitao, Mr. Chen Hao, Mr. Wang Shengniu, Mr. Wang Jianfeng, Mr. Chen Lei, Mr. Wu Hui, Mr. Meng Ping, Mr. Lyu Ke, Mr. Jiang Xisheng, Mr. Pan Shaoqin, Mr. Jiang Yafei, Mr. Wang Weijian, Mr. Su Liqing, Mr. Luo Wencheng, Mr. Zhang Hongxi, Mr. Xiong Lening, Mr. Ying Weimin, Mr. Wu Kunhong, Mr. Wei Chengmin, Mr. Wu Qinming, Mr. Xie Guohui, Mr. Wang Kexiang, Mr. Tang Qibing, Mr. Sun Fuyou, Mr. Ma Yue, Mr. Zhou Jianjun, Mr. Xun Su, Mr. Lu Qi, Mr. Lin Baifeng, Mr. Shen Huifeng, Mr. Zheng Liangcai, Mr. Ma Qingqing, Mr. Wang Hua'nan, Mr. Bai Limin, Ms. Yang Li, Mr. Hou Jinlong, Mr. Hu Kewen, Mr. Zhang Shunmao, Mr. Zha Jun, Mr. Zhou Hong, Mr. Ma Haixu, Mr. Liu Shaowei, Mr. Tang Xinhong, Mr. Yang Chaobin, Mr. Gong Ti, Mr. Cai Changtian, Mr. Gao Ji, Mr. Xiong Yan, Mr. Zhou Taoyuan, Mr. Wang Yixiang, Mr. Li Zhoujian, Mr. He Gang, Mr. Zhang Ping'an, Mr. Bian Honglin, Mr. Xu Qinsong, Mr. Li Xiaolong, Mr. Zhu Ping, Mr. Shao Yang, Mr. Zhu Yonggang, Mr. Chen Yue, Mr. Bai Yi, Mr. Wu Congcheng, Mr. Ye Xiaowen, Ms. Song Yanling, Mr. Zuo Defeng, Mr. Xia Jian, Mr. Wang Nanbin, Mr. Zheng Pingfang, Ms. Cao Yi, Mr. Ran Weidong, Mr. Du Yanxin, and Mr. Wang Yanmin.

Independent Auditor

An independent auditor is responsible for auditing a company's annual financial statements. In accordance with applicable accounting standards and audit procedures, the independent auditor expresses an opinion as to whether the financial statements are true and fair.

The scope of the financial audit and the annual audit results are subject to review by the Audit Committee. Any relationship or service that may potentially affect the objectivity and independence of the independent auditor must be discussed with the Audit Committee. The independent auditor may discuss any issues identified or any difficulties encountered during the course of the financial audits with the Audit Committee.

KPMG has been Huawei's independent auditor since 2000.

Internal Controls

Huawei continued to design and implement an internal control system based on its organizational structure and operating model. The internal control framework and its management system apply to all business and financial processes of the company and its subsidiaries and business units. The internal control system is based on the five components of the COSO framework: Control Environment, Risk Assessment, Control Activities, Information & Communication, and Monitoring. It also covers internal controls of financial statements to ensure their truthfulness, integrity, and accuracy.

Control Environment

A control environment is the foundation of an internal control system. Huawei is committed to a corporate culture of integrity, business ethics, and compliance with laws and regulations. Huawei has issued the BCGs to identify acceptable business conduct. The BCGs must be observed by all employees, including senior executives. Regular training programs are offered, and all employees are requested to sign the BCGs to ensure that the BCGs have been read, understood, and observed.

Huawei has implemented a mature governance structure, with clearly defined authorization and accountability mechanisms. The governance structure comprises the Board of Directors (BOD), its committees, group functions, and multi-level management teams. Huawei clearly defines the roles and responsibilities of its organizations to ensure the effective separation of authority and responsibilities as well as checks and balances through mutual oversight. The CFO of Huawei is in charge of internal controls. The internal control management department reports to the CFO for any possible defects and improvements already made in terms of internal controls, and assists the CFO in building the internal control environment. The internal audit department independently monitors and assesses the status of internal controls for all business operations.

Risk Assessment

Huawei has a department dedicated to internal controls and risk management to regularly assess risks to the company's global business processes. This department identifies, manages, and monitors significant risks, forecasts potential risks caused by changes to the internal and external environments, and submits risk management strategies along with risk mitigation measures for decision making. All process owners are responsible for identifying, assessing, and managing business risks and taking necessary internal control measures. Huawei has instituted a mechanism for improving internal controls and risk controls to efficiently manage critical risks.

Control Activities

Huawei has established the Global Process Management System and the Business Transformation Management System, released the global Business Process Architecture (BPA), and appointed Global Process Owners (GPOs) in line with the BPA.

Responsible for building processes and internal controls, GPOs:

• Identify key control points and the Separation of Duties Matrix for each process, and apply these to all regional offices, subsidiaries, and BUs.
• Conduct compliance tests on key control points and issue test reports to ensure the effectiveness of internal controls is continuously monitored.
• Optimize processes and internal controls based on business pain points and key requirements for financial statements. The aim is to improve operating efficiency and financial results, ensure compliance and the accuracy and reliability of financial statements, and help achieve business objectives.
• Perform annual assessments of internal controls, comprehensively assess overall process design and process execution within each business unit, and then report the results to the Audit Committee (AC).

Information & Communication

Huawei has developed multi-dimensional information and communication channels to ensure the timely acquisition of external information from customers, suppliers, and other parties. It has also created formal channels for transferring internal information, and offered an online space, the Xinsheng Community, for employees to freely communicate their thoughts and ideas. Corporate management holds regular meetings with departments at all levels to effectively communicate management orientation to employees and ensure effective implementation of management decisions. All business policies and processes are available on the company's Intranet.

Managers and process owners regularly organize training programs on business processes and internal controls to ensure that up-to-date information is made available to all employees. The company has established a mechanism for process owners at all levels to regularly communicate with each other, review the execution of internal controls, follow up on internal control issues, and implement improvement plans.

Monitoring

Huawei has established an internal complaint channel, an investigation mechanism, an anti-corruption mechanism, and an accountability system. The Agreement on Honesty and Integrity that Huawei has signed with its suppliers clearly stipulates that suppliers may report improper conduct by Huawei employees through the channels stipulated in the Agreement to assist the company in monitoring the integrity of its employees. The internal audit department independently assesses the overall status of the company's internal controls, investigates any suspected violations of the BCGs, and reports the audit and investigation results to the AC and senior management. Huawei has also implemented a mechanism for internal control appraisals of GPOs and regional managers, holding them accountable and pursuing impeachment when and where necessary. The AC and the CFO regularly review the company's internal control status, and listen to and review reports on action plans for improving internal controls and plan execution progress. Both have the authority to request the relevant GPOs or business executives to explain their internal control issues and take corrective actions.