The company only exists to serve its customers. The purpose of growing our harvest and increasing the fertility of our soil is to better serve our customers. "Staying customer-centric and creating value for customers" are the company's common values. The conferment of authority is required to drive the facilitation and implementation of the company's common values. However, without effective controls in place, authority un-checked will ultimately hinder such common values. The company has a well-developed internal governance structure, under which all governance bodies have clear and focused authority and responsibility, but operate under checks and balances. This creates a closed cycle of authority and achieves rational and cyclical succession of authority.
The company's fate cannot be tied to any single individual and the governance bodies of the company shall follow a model of collective leadership. This collective leadership model is created upon common values, focused responsibility, democratic centralized authority, checks and balances, and growth by self-reflection.
In addition, the company stays customer-centric, inspires dedication, and continuously improves its governance structure, organizations, processes, and appraisal systems to sustain its long-term and profitable growth.
The Shareholders' Meeting, the company's authoritative body, decides on the company's major matters such as capital increases, profit distribution, and election of the members of the Board of Directors and the Supervisory Board.
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 BOD and its Executive Committee are led by rotating chairs. During their terms, the rotating chairs serve as the foremost leader of the company.
As Huawei's highest oversight body, the Supervisory Board exercises the authority of oversight on behalf of the company's shareholders. Its core authorities include leader management, business reviews, and strategic vision.
KPMG has been Huawei's independent auditor since 2000. 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.
As the primary owner of our business strategy, operations management, and customer satisfaction for ICT infrastructure business, the ICT Infrastructure Managing Board conducts end-to-end operations management of our ICT infrastructure business.
The Device BG focuses on serving device consumers and ecosystem partners, and deals with all aspects of the device domain. This BG is responsible for business performance, risk controls, market competitiveness, and customer satisfaction in the device business. With users at the center of everything it does, the Device BG is committed to creating a Seamless AI Life experience. With five key scenarios (smart office, fitness & health, smart home, easy travel, and entertainment) as the focus, the Device BG achieves business success by providing superior experience and service.
Huawei Cloud is responsible for the end-to-end operations and commercial success of Huawei's cloud services by developing the related organizations and capabilities, including R&D, sales, consulting, service, and supply. Huawei Cloud is committed to providing stable, reliable, secure, trustworthy, and innovative cloud services. By diving into digital, Huawei Cloud aims to deliver everything as a service, and build the cloud foundation for an intelligent world with ubiquitous cloud and pervasive intelligence.
Digital Power is an organization that offers enterprise/industry customers products and solutions like clean power generation, transportation electrification, site power facilities, data center facilities, and embedded power. Digital Power is committed to integrating digital and power electronics technologies to provide customers with high-quality, energy-efficient, green, and low-carbon power electronics products, facilitating their business success.
The Intelligent Automotive Solution BU is an end-to-end organization responsible for the company's intelligent automotive business. By leveraging Huawei's expertise in ICT, the BU is committed to providing new components for intelligent connected vehicles and helping car OEMs build better vehicles.
HiSilicon is a provider of a broad range of chipset and module solutions for sensing, connectivity, computing, and display, serving multiple markets including smart devices, display panels, home appliances, and automotive electronics. The company engages in research and development, marketing, ecosystem development, and sales and services for chipsets and modules. It is independently responsible for its own business results, risk management, market competitiveness, and customer satisfaction.
To gradually build a shared service platform to support the development of our multiple businesses and create an anchor for corporate policy execution, the company operates a Platform Coordination Committee. This committee is designed to push group functions to optimize their execution and operations, simplify cross-function operations, and strengthen collaboration, so that group functions will become the best service organizations available to support and promote business operations. Group functions provide business support, services, and oversight. They are positioned to offer accurate, timely, and effective services to field offices and strengthen oversight while delegating sufficient authority to them.
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:
On March 29, 2022, some members of the BOD resigned from their positions. Alternate directors Mr. Li Jianguo and Mr. Peng Bo then took up the vacancies in a predetermined sequence.
The BOD is comprised of the following members:
In 2021, 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 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 2021, the Executive Committee held 19 meetings.
Members of the BOD Executive Committee include Mr. Xu Zhijun, Mr. Hu Houkun, Ms. Meng Wanzhou, Mr. Wang Tao, and Mr. Yu Chengdong.
The BOD and its Executive Committee are led by rotating chairs. During their terms, the rotating chairs serve as the foremost leader of the company. Rotating chairs' terms last six months at a time.
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 include leader management, business reviews, and strategic vision.
The Supervisory Board held 13 meetings in 2021. At the meetings, it reviewed the company's annual financial statements, inspected major areas that may face risks, oversaw the company's operations management, and guided and managed oversight-oriented members of the Subsidiary Board Directors Resources Bureau. Members of the Supervisory Board attended all meetings of the BOD as non-voting participants, overseeing the legitimacy of BOD decisions and operations, as well as the responsibility fulfillment of BOD members and other executives, and assessed BOD members' responsibility fulfilment in 2020.
On March 29, 2022, a new Supervisory Board was elected by the Representatives' Commission and then voted in by the Shareholders' Meeting. The 15 members of the current Supervisory Board are as follows.
There are four alternate members: Mr. Wei Chengmin, Mr. Xu Qinsong, Mr. Wu Qinming, and Mr. Gao Ji. In the event that there is a vacancy in the Supervisory Board, alternate members of the Supervisory Board will take up the vacancy in a predetermined sequence.
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.
Members of the Executive Committee include Mr. Guo Ping, Mr. Li Jie, Ms. Chen Lifang, Mr. Yao Fuhai, Mr. Li Dafeng, Mr. Li Yingtao and Mr. Ma Qingqing.
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.
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.
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 Business Conduct Guidelines (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.
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.
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:
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.
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.
