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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 one of Huawei's core businesses, the ICT infrastructure business works on information distribution, interaction, transmission, processing, and storage, aiming to help customers build CT and IT infrastructure with its leading, innovative products, solutions, and services.
The consumer business puts users at the center of everything it does and is committed to creating a Seamless AI Life experience centered on products. Focusing on five key scenarios (Smart Home, Smart Office, Easy Travel, Fitness & Health, and Entertainment), the consumer business aims to deliver a superior user experience, build an ecosystem alongside its partners, and achieve business success.
Huawei Cloud Computing provides stable, reliable, secure, trustworthy, and innovative cloud services to customers. By diving into digital, Huawei Cloud Computing aims to deliver Everything as a Service and build the cloud foundation for an intelligent world with ubiquitous cloud and pervasive intelligence.
Digital Power offers enterprise and industry customers products and solutions like smart PV, data center facility, critical power supply, and DriveONE. 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 customers' business success.
The Intelligent Automotive Solution Business has brought Huawei's expertise in ICT to the intelligent automotive sector, providing new components for intelligent connected vehicles and helping car OEMs build better vehicles with ICT technologies.
HiSilicon provides board-level chipsets and module solutions to sectors like smart devices, home appliances, and automotive electronics. It offers end-to-end technological capabilities like sensing, connectivity, computing, and display to help devices go digital, connected, intelligent, and low-carbon. Based on chipsets and components, HiSilicon works to empower connected smart devices, enable innovations across different sectors, and help customers achieve business success.
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 drive 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:
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:
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.
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:
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.
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.
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 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 rights and responsibilities. The CFO of Huawei is in charge of internal controls. The business control 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 BPA, and appointed GPOs in line with the BPA. Responsible for building processes and internal controls, GPOs:
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, 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, and follow up on internal control issues.
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, as well as their accountability and impeachment when and where necessary. The AC and the CFO regularly review the company's internal control status, and receive reports on action plans for improving internal controls, if necessary, and on 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. The AC and the CFO may also need to submit their proposals to the HRC for disciplinary action or impeachment.
Huawei Africa as a responsible corporate citizen is committed to complying with all the relevant laws in South Africa. It is also committed to providing world class products and services to all its customers. To this end Huawei Africa has implemented ISO management systems in its operations that conform to world class standards for Health and Safety, Environmental Management, Quality Management as well as Business Continuity Management. This is to ensure that Huawei Africa always maintains optimum relations with all its stakeholders in South Africa and internationally.