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Corporate Governance

Corporate Governance Structure

Adhering to "customers as our focus and dedicated employees as our foundation" from our core values, we continue to improve our corporate governance structure, organizations, processes, and appraisal systems to achieve long-term effective growth.
 
Structure

Shareholders

Huawei Investment & Holding Co., Ltd. (the "company" or "Huawei") is a private company wholly owned by its employees. Shareholders of Huawei are the Union of Huawei Investment & Holding Co., Ltd. (the "Union") and Mr. Ren Zhengfei. The Union contributed 98.82% of the company's total share capital.

Through the Union, the company implements an Employee Shareholding Scheme (the "Scheme"), which involved 74,253 employees as of December 31, 2012. They are represented by and exercise their rights through the elected representatives (the "Representatives"). The Scheme effectively aligns employee contributions with the company's long-term development, fostering Huawei's continued success.

As of December 31, 2012, Mr. Ren Zhengfei contributed 1.18% of the company's total share capital as the individual shareholder, and his participation in the Scheme accounts for 0.21% of the company's total share capital. As such, Mr. Ren's investment in the company accounts for nearly 1.4% in total.

Board of Directors and Committees

The Board of Directors (BOD) is the decision-making body for corporate strategy and management. The BOD guides and oversees the overall business operations and makes decisions on significant strategic issues. The BOD has established the Human Resources Committee, the Finance Committee, the Strategy & Development Committee, and the Audit Committee to assist and support BOD operations.

The key roles and responsibilities of the BOD include:

  • Deciding on the company's strategic directions; approving its medium-to-long-term business plan; monitoring the execution of the plan.
  • Providing advice and guidance to management regarding significant issues, including major risks and market changes.
  • Reviewing the company's business operations, organization, and processes; approving major organizational restructurings, business transformations, and process transformations.
  • Approving the company's major financial policies, financial arrangements, and business transactions.
  • Approving the company's operational and financial results; approving the company's financial statements.
  • Establishing the company's monitoring mechanisms and overseeing their execution.
  • Establishing the company's governance structure and organizing its optimization and deployment.
  • Deciding on the selection, appraisal, and compensation of the Chief Executive Officer; approving the appointment and compensation of other members of senior management.
  • Approving the corporate-level HR planning and major HR policies.
     

In 2012, the BOD held 12 meetings. Throughout the year, the BOD reviewed and approved the company's medium-to-long-term business plan, the annual business plan and budget, quarterly operational performance reports, corporate governance structure and organization building, business ecosystem building, appointments and compensation policies for senior management, and other major HR and financial policies and activities.

The BOD is comprised of 13 members, who were elected by all the Representatives. The members of the BOD are Chairwoman Ms. Sun Yafang; Deputy Chairmen Mr. Guo Ping, Mr. Xu Zhijun, Mr. Hu Houkun, and Mr. Ren Zhengfei; Executive Directors Mr. Xu Wenwei, Mr. Li Jie, Mr. Ding Yun, and Ms. Meng Wanzhou; and Directors Ms. Chen Lifang, Mr. Wan Biao, Mr. Zhang Ping'an, and Mr. Yu Chengdong.

In 2012, the attendance record for each Director is as follows:

attendance record

The BOD has established the Executive Committee, which acts as the executive body of the BOD while the BOD is adjourned. Members of the Executive Committee include Mr. Guo Ping, Mr. Xu Zhijun, Mr. Hu Houkun, Mr. Xu Wenwei, Mr. Li Jie, Mr. Ding Yun, and Ms. Meng Wanzhou. In 2012, the Executive Committee of the BOD held 18 meetings.

Human Resources Committee

The Human Resources Committee manages and improves organizational capabilities such as organization, talent, and culture. This committee establishes key HR management policies under the authorization of the BOD and oversees the execution of these policies. To support the company's business development, the committee ensures that HR policies reflect the company's HR management philosophy while also considering the business characteristics and management models of regions, BGs, and functional departments.

The key roles and responsibilities of the Human Resources Committee include:

  • Managing the succession plans, allocation schemes, and matters related to managerial appointments or removals, performance appraisals, compensation, and incentives for key managers and talent under the authorization of the BOD.
  • Managing overall incentive policies, policies related to social security benefits, the compensation structure, and job matching.
  • Managing policies for organizational development and optimization; managing the HR budget and headcount planning for each budgetary unit.
  • Managing the policies and providing guidance for employee learning and development at all levels.
  • Setting policies related to employee compliance with internal regulatory requirements and managing disciplinary actions against major violations.
  • Providing routine guidance on policies related to the occupational health and safety of employees.
  • Managing the strategic HR plans and key HR transformation activities.


The Human Resources Committee meets on a monthly basis and convenes special sessions whenever needed. At the invitation of the committee, business executives and field-specific experts may attend the meetings as non-voting participants. The Human Resources Committee held 12 meetings in 2012 to meet the requests of the BOD and globalized business development needs of multiple business groups. The subjects discussed included but were not limited to the following: HR strategy planning which focused on talent, organization, incentive, culture, and other managerial elements; selection and development of staff members for key managerial and professional positions; optimization of the company's compensation and incentive structure; review and approval of organizational restructuring proposals; development of a governance mechanism for flexible headcount budgeting; employee discipline and compliance management; development of HR policy frameworks and policies; key implementation decisions; supervision of policy implementation.

The Human Resources Committee is comprised of 19 members, including BOD members, senior business executives, and senior HR experts. The Chairman of the committee is Mr. Hu Houkun. The members include Mr. Guo Ping, Mr. Xu Zhijun, Mr. Xu Wenwei, Mr. Li Jie, Mr. Ding Yun, Ms. Meng Wanzhou, Mr. Li Jian, Mr. Zha Jun, Ms. He Tingbo, Mr. Zhang Ping'an, Mr. Yu Chengdong, Mr. Liang Hua, Mr. Peng Zhiping, Mr. Li Yingtao, Mr. Wan Biao, Mr. Tian Feng, Mr. Li Shanlin, and Mr. Peng Bo.

Finance Committee

The Finance Committee is positioned as the overall enterprise value integrator of the company. Under the authorization of the BOD, the Finance Committee exercises macro-control over the company's business operations, investment activities, and enterprise risks, helping to strike a dynamic balance between opportunities and resources. This facilitates the company's effective growth.

The key roles and responsibilities of the Finance Committee include:

  • Aligning resources with business needs based on the company's resources and resource acquisition capabilities.
  • Setting financial objectives for the growth and investment projects of the company and responsibility centers; determining the standards, structure, and pace for resource investments.
  • Measuring the monetary value of key strategies, conducting forward-looking forecasts and analysis, and submitting proposals to the BOD.
  • Reviewing the company's annual budgeting plan, approving the annual budget for each responsibility center, and ensuring closed-loop management of the corporate-level plan, budget, accounting, and performance appraisals.
  • Reviewing the capital structure plan; making proposals for major financing activities, the asset structure, and profit distribution.
  • Reviewing the company's key financial policies, annual financial statements, and issues related to information disclosure.
  • Reviewing capital operations and strategic cooperation projects, submitting proposals to the BOD, and periodically assessing the execution of such projects.
  • Reviewing the company's risk management framework, advising on trade compliance issues, and establishing a business continuity management system.


The Finance Committee meets on a monthly basis and convenes special sessions whenever needed. Based on business needs and requests of the BOD, the Finance Committee held 12 meetings in 2012. At the meetings, the committee reviewed such items as the company's medium-to-long-term business plan, annual budgeting plan, operational management, capital operations projects, the capital structure, enterprise risk management, and subsidiary and joint venture management. The Finance Committee discussed and established relevant financial policies and systems, reviewed and decided on relevant activities, and monitored the execution of these activities.

The Finance Committee is comprised of 20 members, including BOD members and financial experts. The Chairman of the committee is Mr. Guo Ping. The members include Mr. Xu Zhijun, Mr. Hu Houkun, Mr. Xu Wenwei, Mr. Li Jie, Mr. Ding Yun, Ms. Meng Wanzhou, Mr. Liang Hua, Mr. Wan Biao, Mr. Peng Zhiping, Mr. Tian Feng, Mr. Fang Weiyi, Mr. Song Liuping, Mr. Yao Fuhai, Mr. Jiang Xisheng, Mr. Li Jin'ge, Mr. Peng Qiu'en, Mr. Yi Xiang, Mr. Yang Yuefeng, and Mr. Qiao Nengdong.

Strategy & Development Committee

The Strategy & Development Committee (SDC) considers, sets, and executes the company's strategic directions. The SDC gains insight into major trends concerning the industry, technologies, and customer needs; and identifies opportunities and paths for the company's development. Through macro-management of industrial investments, technologies, business models, and transformations, the SDC ensures that the company continues to achieve effective growth through concerted efforts.

The key roles and responsibilities of the SDC include:

  • Managing the company's medium-to-long-term strategic plan, significant annual targets, and the top priorities of the year.
  • Managing the company's brand strategy, architecture, and characteristics, as well as the publicity strategy and direction of the company.
  • Managing the company's strategy for strategic partnerships and alliances, as well as the selection of strategic partners and allies.
  • Managing the company's business portfolios and scope.
  • Managing the company's pricing policies, commercial authorization principles, and actual pricing of key strategic products.
  • Managing the company's medium-to-long-term technology development plan, standards and patent strategy, and major technology investments.
  • Managing the company's medium-to-long-term business transformation strategy, process and management system structure, and quality policies.
  • Reviewing the company's business portfolios frequently to ensure investments are made in the strategic domains.
     

The SDC held 12 meetings in 2012 and a four-day strategy and development workshop in September. In accordance with the positioning and responsibility determined by the BOD, the SDC focuses on the company's strategy formulation and direction. By setting the business positioning and directions of related industries, the SDC has enabled the company's core business to be focused on the targeted carrier, enterprise, and consumer customers so that BGs can develop and operate based on the characteristics of their specific customers and industries. Through strategy planning and execution, the SDC established a closed-loop strategy management system to help the company achieve business objectives.

The SDC is comprised of 23 members, including BOD members, senior business executives, and field-specific senior experts. The Chairman of the committee is Mr. Xu Zhijun. The members include Mr. Guo Ping, Mr. Hu Houkun, Mr. Xu Wenwei, Mr. Li Jie, Mr. Ding Yun, Ms. Meng Wanzhou, Mr. Hou Jinlong, Mr. Zhang Ping'an, Mr. Li Yingtao, Mr. He Gang, Mr. Zha Jun, Mr. Tang Qibing, Mr. Zhang Xinyu, Mr. Peng Bo, Mr. Deng Biao, Mr. Yu Chengdong, Mr. Wang Tao, Mr. Liang Hua, Mr. Zheng Yelai, Mr. Wu Qinming, Ms. He Tingbo, and Mr. Peng Zhongyang.

Audit Committee

The Audit Committee oversees internal controls under the authorization of the BOD. The oversight responsibilities include monitoring the internal control system, internal and external audits, and corporate processes, as well as compliance with laws and regulations and the Business Conduct Guidelines (BCG).

The key roles and responsibilities of the Audit Committee include:

  • Approving the internal audit plan of the year; reviewing the scope of the internal audit plan, resources required for its execution, and the results of the execution.
  • Approving corporate policies related to internal control management; approving the company's internal control development plan and key milestones; regularly assessing the company's overall internal control posture.
  • Overseeing the effectiveness of the ethics and compliance function, and the company's compliance with legal and regulatory requirements as well as corporate policies.
  • Reviewing the selection of external auditors; reporting the change of external auditors to the BOD for approval, and approving all related fees; assessing the effectiveness of external auditors' performance.
  • Supervising the integrity, completeness, and legal compliance of the company's financial statements; reviewing accounting policy compliance and application as well as disclosure of financial statements.
  • The Audit Committee approves the control KPIs at the beginning of each year, and has the right to summon Global Process Owners (GPOs) and business executives to report their control work.


The Audit Committee meets on a quarterly basis and convenes special sessions whenever needed. At the invitation of the Audit Committee, business executives and field-specific experts may attend the meetings as non-voting participants. The Audit Committee held four meetings in 2012. Focusing on topics such as risk management and internal control construction, the Audit Committee reviewed and approved the annual internal audit planning and the updated three-year roadmap for global process control construction, and listened to the internal control maturity trend reports, the Semi-Annual Control Assessment (SACA) reports, and the control improvement work reports presented by GPOs. The Audit Committee also improved employee compliance with Huawei's BCG by publicizing major audit findings and non-compliance cases. In addition, the Audit Committee discussed the management improvement proposal with the external auditor.

The Audit Committee is comprised of 9 members, including members of the Supervisory Board, BOD members, and field-specific experts. The Chairman of the committee is Mr. Liang Hua. The members include Mr. Peng Zhiping, Mr. Ren Shulu, Mr. Tian Feng, Mr. Li Jie, Mr. Chen Zhaohui, Mr. Peng Zhijun, Mr. Hui Chun, and Mr. Zhou Daiqi.

Supervisory Board

Pursuant to the requirements of the Company Law of the People's Republic of China, Huawei has established a Supervisory Board. The key roles and responsibilities of the Supervisory Board include overseeing the company's financial and operational performance, monitoring the responsibility fulfillment of BOD members and senior management, as well as the standardization of BOD operations. Members of the Supervisory Board attend BOD meetings as non-voting participants.

In 2012, the Supervisory Board held one meeting, reviewing and assessing the financial performance of the company, and conducting training sessions and workshops regarding its roles and responsibilities for financial supervision. Throughout the year, members of the Supervisory Board attended 12 meetings of the BOD as non-voting participants, monitoring the financial performance of the company, the responsibility fulfillment of BOD members and senior management, and the standardization of BOD operations.

The Supervisory Board is comprised of 5 members, who were elected by all the Representatives. The members of the Supervisory Board are Chairman Mr. Liang Hua, and members Mr. Peng Zhiping, Mr. Ren Shulu, Mr. Tian Feng, and Mr. Deng Biao.

Rotating CEOs

Huawei implements the rotating CEO system under the leadership of the BOD. Acting as the primary person of the company's operations and crisis management during his tenure, the rotating and acting CEO is responsible for the company's survival and development.

The rotating and acting CEO is responsible for convening and chairing the meetings of the Executive Committee of the BOD. During routine management decision making, the rotating and acting CEO apprises members of the BOD and the Supervisory Board of his responsibility fulfillment in a timely manner.

Three Deputy Chairmen take turns to act as the rotating and acting CEO for a tenure of six months. In 2012, the acting tenures for the three rotating CEOs are as follows:

  • Mr. Hu Houkun: October 1, 2011 – March 31, 2012
  • Mr. Xu Zhijun: April 1, 2012 – September 30, 2012
  • Mr. Guo Ping: October 1, 2012 – March 31, 2013


Members of the Board of Directors, the Supervisory Board, and the BOD Committees

Corporate Governance1

Members of the Board of Directors
From the left in the first row: Mr. Hu Houkun, Ms. Sun Yafang, Mr. Guo Ping, Ms. Chen Lifang, Mr. Xu Wenwei
From the left in the second row: Mr. Zhang Ping'an, Mr. Yu Chengdong, Mr. Xu Zhijun, Mr. Ren Zhengfei, Mr. Ding Yun, Ms. Meng Wanzhou, Mr. Li Jie, Mr. Wan Biao


Director Biographies

Ms. Sun Yafang


Ms. Sun joined Huawei in 1989, and had served as an engineer of the Marketing & Sales Dept, Director of the Training Center, President of the Procurement Dept, General Manager of Wuhan Office, President of the Marketing & Sales Dept, Chair of the Human Resources Committee, Chair of the Business Transformation Executive Steering Committee (BT-ESC), Chair of the Strategy and Customer Standing Committee, and President of Huawei University. Since 1999, Ms. Sun has been the Chairwoman of the Board.

Prior to joining Huawei, Ms. Sun worked as a technician at the state-owned Xinxiang Liaoyuan Radio Factory in 1982, a teacher at China Research Institute of Radio Wave Propagation in 1983, and an engineer at Beijing Research Institute of Information Technology in 1985.

Ms. Sun was born in 1955, and graduated in 1982 with a bachelor's degree from Chengdu University of Electronic Science and Technology.

Mr. Guo Ping

Born in 1966, Mr. Guo holds a master's degree from Huazhong University of Science and Technology. Mr. Guo joined Huawei in 1988 and has served as an R&D project manager, General Manager of Supply Chain, Director of Huawei Executive Office, Chief Legal Officer, President of the Business Process & IT Mgmt Dept, President of the Corporate Development Dept, Chairman and President of Huawei Device, Corporate EVP, and Chairman of the Finance Committee.

Mr. Xu Zhijun (Eric Xu)

Born in 1967, Mr. Xu holds a doctorate degree from Nanjing University of Science & Technology. Mr. Xu joined Huawei in 1993 and has served as President of the Wireless Product Line, Chief Strategy & Marketing Officer, Chief Products & Solutions Officer, Chairman of the Investment Review Board, Corporate EVP, and Chairman of the SDC.

Mr. Hu Houkun (Ken Hu)

Born in 1967, Mr. Hu holds a bachelor's degree from Huazhong University of Science and Technology. Mr. Hu joined Huawei in 1990 and has served as President of the Marketing & Sales Dept in China, President of the Latin America Region, President of the Global Sales Dept, Chief Sales & Service Officer, Chief Strategy & Marketing Officer, Chairman of the Corporate Global Cyber Security Committee, Chairman of the BOD of Huawei USA, Corporate EVP, and Chairman of the Human Resources Committee.

Mr. Ren Zhengfei

Born on October 25, 1944 into a rural family where both parents were school teachers, Mr. Ren Zhengfei spent his primary and middle school years in a remote mountainous town in Guizhou Province. In 1963, he studied at the Chongqing Institute of Civil Engineering and Architecture. After graduation, he was employed in the civil engineering industry until 1974 when he joined the military's Engineering Corps as a soldier tasked to establish the Liao Yang Chemical Fiber Factory. Subsequently, Mr. Ren had taken positions as a Technician, an Engineer, and was lastly promoted as a Deputy Director, which was a professional role equivalent to a Deputy Regimental Chief, but without military rank. Because of his outstanding performance, Mr. Ren was invited to attend the National Science Conference in 1978 and the 12th National Congress of the Communist Party of China in 1982. Mr. Ren retired from the army in 1983 when the Chinese government disbanded the entire Engineering Corps. He then worked in the logistics service base of the Shenzhen South Sea Oil Corporation. As he was dissatisfied with his job, he decided to establish Huawei with a capital of CNY21000 in 1987. He became the CEO of Huawei in 1988 and has held the title ever since.

Mr. Xu Wenwei (William Xu)


Born in 1963, Mr. Xu holds a master's degree from Southeast University. Mr. Xu joined Huawei in 1991 and has served as President of the International Technical Sales & Marketing Dept, President of the European Area, Chief Strategy & Marketing Officer, Chief Sales & Service Officer, President of the Joint Committee of Regions, and CEO of the Enterprise BG.

Mr. Li Jie (Jason Li)

Born in 1967, Mr. Li holds a master's degree from Xi'an Jiaotong University. Mr. Li joined Huawei in 1992 and has served as Regional President, President of the Global Technical Service Dept, President of the Human Resource Mgmt Dept, and President of the Joint Committee of Regions.

Mr. Ding Yun (Ryan Ding)

Born in 1969, Mr. Ding holds a master's degree from Southeast University. Mr. Ding joined Huawei in 1996 and has served as Product Line President, President of the Global Solution Sales Dept, President of the Global Marketing Dept, Chief Products & Solutions Officer, and CEO of the Carrier Network BG.

Ms. Meng Wanzhou (Cathy Meng)

Born in 1972, Ms. Meng holds a master's degree from Huazhong University of Science and Technology. Ms. Meng joined Huawei in 1993. She obtained her M.A. in 1998. Ms. Meng has served as Director of the International Accounting Dept, CFO of Huawei Hong Kong, President of the Accounting Mgmt Dept, President of the Sales Financing & Treasury Mgmt Dept, and currently, CFO of Huawei.

Ms. Chen Lifang

Born in 1971, Ms. Chen graduated from Northwest University in China. Ms. Chen joined Huawei in 1995 and has served as Chief Representative of the Beijing Representative Office, Vice President of the International Marketing Dept, Deputy Director of the Domestic Marketing Management Office, President of the Public Affairs and Communications Dept, and Corporate Senior Vice President.

Mr. Wan Biao

Born in 1972, Mr. Wan holds a bachelor's degree from the University of Science and Technology of China. Mr. Wan joined Huawei in 1996 and has served as Director for the UMTS RAN System, President of the UMTS Product Line, President of the Wireless Product Line, and CEO of Huawei Device.

Mr. Zhang Ping'an (Alex Zhang)

Born in 1972, Mr. Zhang holds a master's degree from Zhejiang University. Mr. Zhang joined Huawei in 1996 and has served as Product Line President, Senior Vice President, Vice President of Strategy & Marketing, Regional Vice President, Vice President of the Global Technical Service Dept, CEO of Huawei Symantec, COO of the Enterprise BG, and President of the Carrier Software & Core Network Business Unit.

Mr. Yu Chengdong (Richard Yu)

Born in 1969, Mr. Yu holds a master's degree from Tsinghua University. Mr. Yu joined Huawei in 1993 and has served as 3G Product Director, Vice President of the Wireless Technical Sales Dept, President of the Wireless Product Line, President of the European Area, Chief Strategy & Marketing Officer, Chairman of Huawei Device, and CEO of the Consumer BG.

Corporate Governance2

Members of the Supervisory Board
From the left: Mr. Deng Biao, Mr. Ren Shulu, Mr. Liang Hua, Mr. Tian Feng, Mr. Peng Zhiping

Supervisory Board Member Biographies

Mr. Liang Hua (Howard Liang)


Born in 1964, Mr. Liang holds a doctorate degree from Wuhan University of Technology. Mr. Liang joined Huawei in 1995 and has served as President of Supply Chain, CFO of Huawei, President of the Business Process & IT Mgmt Dept, President of the Global Technical Service Dept, and Chairman of the Audit Committee.

Mr. Peng Zhiping (Benjamin Peng)


Born in 1967, Mr. Peng holds a master's degree from Fudan University. Mr. Peng joined Huawei in 1996 and has served as President of the Terminal Product Line, President of the Optical Network Product Line, President of the Supply Chain Mgmt Dept, President of the Procurement Qualification Mgmt Dept, Chief Operations & Delivery Officer, President of the Integrated Business Services (IBS), and Chief Supply Chain Officer.

Mr. Ren Shulu (Steven Ren)

Born in 1956, Mr. Ren holds a bachelor's degree from Yunnan University. Mr. Ren joined Huawei in 1992 and has served as President of Shenzhen Smartcom Business Co., Limited, Chairman of the Capital Construction Investment Management Committee, and currently, President of the Internal Service Mgmt Dept.

Mr. Tian Feng

Born in 1969, Mr. Tian holds a bachelor's degree from Xidian University. Mr. Tian joined Huawei in 1995 and has served as EVP of the Middle East and Northern Africa Area, President of the Middle East Region, President of the China Region, CEO of Huawei Agisson, Vice President (acting) of the Human Resource Mgmt Dept, EVP of Huawei University, Director of the Institute of Education of Huawei University, and Director of the Disciplinary and Supervisory Sub-committee of the Human Resources Committee.

Mr. Deng Biao (Alex Deng)

Born in 1971, Mr. Deng holds a bachelor's degree from Jiangxi University. Mr. Deng joined Huawei in 1996 and has served as President of the Access Network Product Line, President of the Network Product Line, President of the Carrier Software & Core Network Business Unit, and President of the Business Process & IT Mgmt Dept.

Committee Member Biographies


Only the biographies of committee members not listed in "Director Biographies" or "Supervisory Board Member Biographies" are included in this section. (The order in which the biographies are provided is based on the number of strokes needed to complete the Chinese character that corresponds to the member's surname.)

Mr. Fang Weiyi

Born in 1965, Mr. Fang holds a master's degree from the Aeronautics Computing Technique Research Institute. Mr. Fang joined Huawei in 1995 and has served as an engineer, Director of the Intelligent Network Product Line, Director of the Strategy and Planning Dept, President of the Finance Mgmt Dept, President of the Sales & Delivery Finance Mgmt Dept, and currently, CFO of the Carrier Network BG and member of the Finance Committee.

Mr. Jiang Xisheng


Born in 1966, Mr. Jiang holds a bachelor's degree from Xidian University. Mr. Jiang joined Huawei in 1989 and has served as Vice President of the Marketing & Sales Dept, General Manager of the General Procurement Dept, Vice President and CFO of Huawei Electric, Director of the Investment Mgmt Dept, Vice President of the Finance Dept, Chief Secretary of the BOD, and member of the Finance Committee.

Mr. Tang Qibing

Born in 1970, Mr. Tang holds a master's degree from the University of Electronic Science and Technology of China. Mr. Tang joined Huawei in 1996 and has served as Vice President of the Global Technical Sales Dept, Vice President of the Middle East and Northern Africa Area, General Manager of the Turkey Representative Office, President of the Central Asia Region, President of the Global Sales Dept under the Enterprise BG, and member of the SDC.

Mr. Li Jian (James Lee)

Born in 1973, Mr. Li holds a master's degree from Xidian University. Mr. Li joined Huawei in 2001 and has served as General Manager of the Nigeria Representative Office, President of the Western Africa Region, Special Assistant to Chief Sales& Service Officer, President of the Accounts and Regions Business Mgmt Dept, President of the CEE & Nordic Region, President of the Latin America Area, Vice President of the Joint Committee of Regions, and member of the Human Resources Committee.

Mr. Li Shanlin

Born in 1968, Mr. Li holds a master's degree from Beijing University of Aeronautics and Astronautics. Mr. Li joined Huawei in 1996 and has served as an R&D project manager, Department Manager at Huawei Technologies India Private Limited, Deputy Chief of the Beijing Research Center, Director of the R&D Dept of the Data Communications Product Line, Deputy Director of the HR Branch of Products & Solutions, Vice President of the Human Resource Mgmt Dept, and member of the Human Resources Committee.

Mr. Li Jin'ge

Born in 1968, Mr. Li holds a bachelor's degree from Beijing University of Posts and Telecommunications. Mr. Li joined Huawei in 1992 and has served as Regional Vice President, Regional President, President of the Global Technical Sales Dept, President of the Sub-Sahara Area, member of the Joint Committee of Regions, and member of the Finance Committee.

Mr. Li Yingtao

Born in 1969, Mr. Li holds a doctorate degree from Harbin Institute of Technology. Mr. Li joined Huawei in 1997 and has served as Chief of the Sweden Research Center, Director of the Product Mgmt Dept of Wireless Marketing, Director of the Research Dept of Products & Solutions, Director of the General Technology Office of Products & Solutions, President of the Central Research & Development Unit, President of the 2012 Laboratories, Director of the Integrated Technology Management Team, member of the Human Resources Committee, and member of the SDC.

Mr. Yang Yuefeng

Born in 1971, Mr. Yang holds a master's degree from Huazhong University of Science and Technology. Mr. Yang joined Huawei in 1996 and has served as an engineer in the Hardware Dept, Director of the Multimedia Product Line, President of the Fixed Terminal Product Line, Vice President & CFO of Huawei Device, and member of the Finance Committee.

Mr. Wu Qinming

Born in 1972, Mr. Wu holds a bachelor's degree from Peking University. Mr. Wu joined Huawei in 1996 and has served as General Manager of the Router Product Line, General Manager of the Software Dept at the Beijing Research Center, Director of the Enterprise Product Line, Deputy Director of the Marketing Dept of the Optical Network Product Line, Director of the Strategic Development Dept, and currently, President of the Investment Mgmt Dept, Vice President of the Corporate Development Dept, and member of the SDC.

Mr. He Gang

Born in 1973, Mr. He holds a master's degree from Xidian University. Mr. He joined Huawei in 1998 and has served as a GSM hardware engineer, President of the GSM Product Line, President of the GSM&UMTS Product Line, Director of the Global Wireless Solution Sales Dept, President of the Handset Product Line of Huawei Device, and member of the SDC.

Ms. He Tingbo (Teresa He)

Born in 1969, Ms. He holds a master's degree from Beijing University of Posts and Telecommunications. She joined Huawei in 1996 and has since served as ASIC engineer/senior engineer/chief engineer, R&D Director of HiSilicon, President of HiSilicon, Vice President of the 2012 Laboratories, member of the Human Resources Committee, and member of the SDC.

Mr. Wang Tao (David Wang)

Born in 1972, Mr. Wang holds a master's degree from Xi'an Jiaotong University. Mr. Wang joined Huawei in 1997 and has served as PDT Manager of the PS Core Network Product Line, Chief Engineer in the UMTS Technical Sales Dept, Director of the Wireless Product Line in the European Area, Director of the Technical Sales Dept in the European Area, General Manager of the subsidiaries in Italy/Switzerland, President of the Wireless Network Business Dept, and member of the SDC.

Mr. Song Liuping

Born in 1966, Mr. Song completed his postdoctoral research at Beijing Institute of Technology. Mr. Song joined Huawei in 1996 and has served as Manager of the Product Strategy Planning Office, Director of the Intellectual Property Rights Dept, Director of the External Cooperation Dept, President of the Legal Affairs Dept, Chief Legal Officer, ST member of Products & Solutions, AT Deputy Director of the Standard & Patent Dept under the Research Dept, Chairman of the Patent Review Board, and member of the Finance Committee.

Mr. Zhang Xinyu (Bill Zhang)

Born in 1972, Mr. Zhang holds a master's degree from Nanjing University. Mr. Zhang joined Huawei in 1997 and has served as Director of the Marketing Dept under the Core Network Product Line, Director of the Marketing Dept in the Asia- Pacific Region, Vice President of the Northern Latin America Region, Vice President of the Carrier Network BG, and member of the SDC.

Mr. Chen Zhaohui (Edward Chen)

Born in 1967, Mr. Chen holds a master's degree at China Institute of Atomic Energy in Beijing. Mr. Chen joined Huawei in 1994 and has served as General Manager of the UK Representative Office, President of Huawei Device, Chairman of the CSR Committee, Vice President of the Business Process & IT Mgmt Dept, and member of the Audit Committee.

Mr. Yi Xiang (Steven Yi)

Born in 1975, Mr. Yi holds a bachelor's degree from Wuhan University. Mr. Yi joined Huawei in 1998 and has served as Director of the Sales Mgmt Dept in the Asia-Pacific Area, General Manager of the Pakistan Representative Office, President of the Middle East Region, President of the Sales & Delivery Finance Mgmt Dept, and member of the Finance Committee.

Mr. Zhou Daiqi

Born in 1947, Mr. Zhou graduated from Xidian University. Mr. Zhou joined Huawei in 1994 and has served as an ATM product manager, Chief Engineer and General Manager at the Multimedia Dept, Director of the Hardware Dept, Chief of the Xi'an Research Center, Director of the HR Branch of Products & Solutions, and currently, Director of the Corporate Committee of Ethics and Compliance, and member of the Audit Committee.

Mr. Zheng Yelai (Leif Zheng)

Born in 1973, Mr. Zheng holds a master's degree from Northwestern Polytechnical University. Mr. Zheng joined Huawei in 1999 and has served as Product Manager of the Wireless Product Line, OM SPDT Director of the Wireless Product Line, President of the Wireless OSS&Service Product Line, President of the IT Product Line, and member of the SDC.

Mr. Zha Jun

Born in 1971, Mr. Zha holds a master's degree from Zhejiang University. Mr. Zha joined Huawei in 1997 and has served as an R&D product manager, Director of the IMS Product Line, President of the Router and Network Security Product Line, President of the Network Product Line, President of the Fixed Network Business Unit, member of the Human Resources Committee, and member of the SDC.

Mr. Hou Jinlong

Born in 1970, Mr. Hou holds a bachelor's degree from Shanghai Jiaotong University. Mr. Hou joined Huawei in 1996 and has served as an R&D project manager, Director of the Wireless Technical Sales Dept, Vice President of the Marketing Dept, Director of the Wireless Marketing Dept, CEO of TD Tech Ltd., President of the Energy & Infrastructure Product Line, President of the Network Energy Product Line, and member of the SDC.

Mr. Yao Fuhai

Born in 1968, Mr. Yao holds a bachelor's degree from the University of Electronic Science and Technology of China. Mr. Yao joined Huawei in 1997 and has served as Director of the Pricing Center, Vice President of the Business Process & IT Mgmt Dept, Vice President of the Strategy Cooperation Dept, Vice President of the Global Technical Sales Dept, President of the Global Technical Service Dept, President of the Procurement Qualification Mgmt Dept, and member of the Finance Committee.

Mr. Peng Bo (Vincent Peng)

Born in 1976, Mr. Peng holds a bachelor's degree from Harbin Institute of Technology. Mr. Peng joined Huawei in 1999 and has served as an account manager of the Customer Relationship Mgmt Dept, an account manager of the Hong Kong Office, Director of the Vodafone Account Dept, Vice President of the Western European Region, President of the Global Sales and Key Accounts Dept, President of the Global Sales Dept of the Carrier Network BG, member of the EMT for the Carrier Network BG, member of the Human Resources Committee, and member of the SDC.

Mr. Peng Zhongyang

Born in 1968, Mr. Peng holds a bachelor's degree from Huazhong University of Science and Technology. Mr. Peng joined Huawei in 1997 and has served as a transmission product engineer in the Technical Service Dept in the South China Area, Transmission Product Project Manager and a business expansion engineer at the Russia Representative Office, Transmission Product Project Manager at the Yemen Representative Office, Account Manager at the Yemen Representative Office, General Manager of the Yemen Representative Office, President of the North Africa Region, and President of the China Region.

Mr. Peng Zhijun (Peter Peng)

Born in 1969, Mr. Peng holds a master's degree from Shanghai University of Finance and Economics. Mr. Peng joined Huawei in 1997 and has served as Director of the Investment Mgmt Dept, CFO of the Latin America Area, Director of the Tax Mgmt Dept, Vice President of the Finance Mgmt Dept, Deputy Director of the Business Control and Enterprise Risk Mgmt Dept, and currently, Chief Risk Review Officer, and member of the Audit Committee.

Mr. Peng Qiu'en (Ted Peng)

Born in 1971, Mr. Peng holds a master's degree from Zhongnan University of Economics and Law. Mr. Peng joined Huawei in 1997 and has served as Director of the Budget & Cost Mgmt Dept, Director of the Financial Planning & Analysis Dept, Vice President of the Sales & Delivery Finance Mgmt Dept, CFO of the India Region, President of the Finance Mgmt Dept, and member of the Finance Committee.

Mr. Hui Chun (Clark Hui)

Born in 1963, Mr. Hui holds a master's degree from Huazhong University of Science and Technology. Mr. Hui joined Huawei in 1989 and has served as President of the Procurement Qualification Mgmt Dept, Vice President of Finance & President of the Business Control Dept, Vice President of the Business Process & IT Mgmt Dept, and currently, Director of the Engineering Inspection Dept and member of the Audit Committee.

Mr. Qiao Nengdong (Joe Qiao)

Born in 1973, Mr. Qiao holds a master's degree from Nankai University. Mr. Qiao joined Huawei in 1998 and has served as Vice President of the Accounting Mgmt Dept, CFO of the Northern Africa Region, CFO of the Enterprise BG, and member of the Finance Committee.

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 can 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.

Business Structure


The company has established three BGs: the Carrier Network BG, the Enterprise BG, and the Consumer BG. Each BG is a responsibility center for the end-to- end operations in a particular customer domain.BGs are the main driving force behind Huawei's operations. Each BG is responsible for ensuring effective growth and improving efficiency for the company as well as achieving business objectives and ensuring customer satisfaction for its business domain.

Each BG has established an executive management team (EMT) to manage its operations. The CEO of each BG is also the head of that BG's EMT.

  • The CEO of the Carrier Network BG is Mr. Ding Yun.
  • The CEO of the Enterprise BG is Mr. Xu Wenwei.
  • The CEO of the Consumer BG is Mr. Yu Chengdong.


Service BGs (SBGs) are responsibility centers that provide end-to-end support and services for BGs. SBGs shall continuously increase efficiency and reduce operating costs. Huawei has established five SBGs: the 2012 Laboratories, Integrated Business Services (IBS), Manufacturing, Huawei University, and Huawei Internal Services. The President of the 2012 Laboratories is Mr. Li Yingtao; the President of IBS is Mr. Peng Zhiping; the President of Manufacturing is Mr. Li Jianguo; the President of Huawei Internal Services is Mr. Ren Shulu.

The Group Functions provide BGs with support, services, and supervision. They are positioned to offer accurate, timely, and effective services to field offices and strengthen supervision while delegating sufficient authority to field offices. Acting as the company's special commissioner, the Joint Committee of Regions (JCR), under the Group Functions, coordinates and monitors authority, and manages managers on behalf of the Company. The JCR organizes the development of the company's regional strategies worldwide and supervises their execution. The JCR also manages regional platform building and organizational operations. The President of the JCR is Mr. Li Jie.

The Financial Investment Management Platform is responsible for the profits and losses of financial investments. This platform oversees finance and business operations.

Continuous Improvement of Management Systems

Huawei established global management systems to promote and pass down our corporate culture while achieving effective business management. The aim is to:

  • Advocate customer centricity and further enable customer success.
  • Ensure risks are controlled and business continuity is guaranteed.
  • Shoulder corporate social responsibilities (CSR) to promote sustainable social development.


Huawei's management systems are based on ISO9001 (an international standard for quality management systems) and TL9000 (an international standard for quality management systems of the telecom industry). Through continuous evolutions, Huawei has developed the capabilities of making frequent self-assessments and improvements to continuously meet the requirements and expectations of customers and other stakeholders.

We fulfilled the requirements of our management systems in accordance with our corporate strategy and strengthened the building of customer-centric and process-based management systems to effectively support business development and continuous improvement. In order to streamline processes end-to-end, Huawei incorporated requirements associated with quality, internal controls, Environment, Health, and Safety (EHS), cyber security, and CSR into marketing, R&D, supply chain, procurement, delivery, service, and other business domains. Huawei also promoted continuous improvements through quality measurement in accordance with best practices of the industry.

To ensure that the products and services we provide to our customers are effective and reliable, we had our systems certified by multiple independent third parties. Additionally, Huawei obtained certification in ISO9001/TL9000 (quality), ISO14001 (environment), OHSAS18001 (health and safety), and ISO27001 (information security). Huawei also obtained certification in SA8000 (CSR) in the device domain.

Huawei has also successfully passed the comprehensive audits, regular assessments, and stringent reviews conducted by 22 of the world's top 50 carriers. The items covered include financial stability, quality management, delivery, supply chain management, knowledge management, project management, information and cyber security, risk management, EHS, CSR, and business continuity. We enjoy wide recognition from our customers in these key domains, as evidenced by their choice of Huawei as a strategic partner.

Strategy to Execution

Huawei launched its "Develop Strategy to Execute (DSTE)" closed-loop management system to gradually shift to the business operating model in which business planning, budgeting, and performance appraisal are driven by strategy. This action aims to ensure that the medium-to-long-term strategic objectives of the company and each business unit are taken into account in the annual plan and budgets, thus helping ensure that business units are well coordinated. This action also aims to establish stable and sustainable business systems and assist the company in achieving its strategic and business objectives.

During the annual business planning and budgeting, Huawei utilizes balanced scorecards to measure its organizational performance. Corporate strategic objectives are broken down into organizational performance objectives at all levels. At Huawei, work reports are conducted level-by-level, personal business commitments (PBCs) are managed for employees, and the applications of organizational and individual performance results are strengthened. These approaches ensure that organizational and individual objectives are aligned with the company's objectives and that the company's strategy is effectively understood and implemented across the organization.

Management Transformations

In 2012, Huawei made further management improvements and implemented a variety of transformation programs to improve customer satisfaction and internal operational efficiency and reduce operating risks. These transformations included:

  • Customer Relationship Management (CRM) Transformation: Huawei developed customer-centric marketing, sales, and service strategies to ensure that we remain focused on customer expectations/requirements, improve efficiency, and reduce costs while creating maximum value for customers to enable their success and eventually Huawei's success. Huawei developed the Develop and Manage Customer Relationship Plan, Manage Customer Expectation and Satisfaction, and Lead to Cash (LTC) processes, and constructed and deployed the IT system that supports the LTC process.
  • Customer Issue Management Transformation: This transformation aims to ensure that issues raised by customers are resolved in accordance with contracts in a timely and effective manner to protect service continuity and cyber security of customer equipment and networks. This initiative also drives the company to improve its products and management to ensure customer satisfaction. Through the release and use of the Issue to Resolution (ITR) process system, issues raised by customers are handled effectively and managed in a closed loop.
  • Continuous Integrated Financial Services (IFS) Transformation: Huawei is building a global financial management system to facilitate the company's sustainable and profitable growth through data-based management. To date, Huawei has nearly finished streamlining financial and business processes and data at the transaction level. Currently, Huawei is developing and enhancing comprehensive financial capabilities related to operations and decision making.
  • Continuous Optimization of the Integrated Product Development (IPD) Process: Huawei continues to optimize the structured processes, heavyweight teams, governance systems, and IT enablers in the IPD domain to constantly improve IPD operational efficiency and product competitiveness. Huawei also develops products designed for marketing, manufacturing, procurement, servicing, and other purposes to boost end-to-end operational efficiency. Additionally, Huawei is transforming its service IPD process to meet the requirements of new industries, a move instrumental to the development and transformation of the service industry.
  • Project Management and Knowledge Management Transformations: Huawei is building a management culture focused on project operations. The aim is to change related processes, organizations, resource allocation mechanisms, and appraisal mechanisms so that projects are treated as independent operating units. To improve organizational efficiency, Huawei also deploys a resource buy-and-sell mechanism that enables project teams to buy resources from Group Functions. In addition, Huawei deploys knowledge and document management, and establishes knowledge communities to enhance knowledge and experience sharing, thus improving employees' efficiency.


Organizational Capabilities

Business departments widely adopt the shared service model to consolidate global resources. Huawei has established 12 Centers of Expertise (COEs) and 22 Shared Service Centers (SSCs) across 13 countries to support the company's globalization strategy and operational excellence. Huawei is operating and improving its COEs and SSCs in terms of finance, service resource delivery, and procurement fulfillment worldwide. Huawei has also established HR, IT, and bidding SSCs to better provide quality and efficient services for BGs and regional organizations, enabling them to focus more on customers. While reasonably allocating resources around the globe, Huawei created 3,500 jobs in the countries (excluding China) in which the COEs and SSCs are located, boosting employment and economic development in local communities.

Establishment of the Internal Control System


Huawei has designed and implemented an internal control system based on its organizational structure and operational model. The internal control framework and its related management system apply to all business and financial processes of the company and its subsidiaries and business units. This internal control system is based on COSO model, which consists of five components: Control Environment, Risk Assessment, Control Activities, Information & Communication, and Monitoring. The internal control system also includes internal controls for financial statements to ensure that the financial statements are true, complete, and accurate.

Control Environment

A control environment is the foundation for an internal control system. Huawei is dedicated to maintaining a corporate culture of integrity, placing a high value on business ethics, and strictly complying with laws and regulations. Huawei has established its BCG to define the company's standards for acceptable conduct. Huawei also provides training programs, requires all employees to acknowledge their understanding of and commitment to complying with the BCG, and asks all employees to sign the BCG on a regular basis.

Huawei has a well-established governance structure with clear authorizations and accountabilities. The governance structure is comprised of the BOD, its committees, Group Functions, and multi-level administrative teams. Huawei has clearly defined roles and responsibilities for its teams to ensure checks and balances. The CFO of Huawei is in charge of internal control management. The Business Control Dept identifies areas for improvement and reports improvements made in terms of internal controls to the CFO and assists the CFO in building the internal control environment. The Internal Audit Dept independently monitors and assesses the effectiveness of internal controls for all operational activities.

Risk Assessment

Huawei has established a dedicated risk management department to regularly assess risks related to all business processes around the globe. This department identifies, manages,and monitors the significant risks, forecasts potential risks caused by changes in both the internal and external environments, and submits risk management strategies along with mitigating measures for decision making.

All process owners are responsible for identifying, assessing, and managing different types of risks and related internal control measures. The assessment factors include the likelihood of negative events and potential impact.

Control Activities


Huawei has established the Global Process Management System (GPMS) and the Business Transformation Management System (BTMS), released the global Business Process Architecture (BPA), and appointed Global Process Owners (GPOs) based on the BPA. As the role responsible for process and internal control building, GPOs identify Key Control Points (KCPs) and the Separation of Duties Matrix for each process and apply them to all regions, subsidiaries, and business units. GPOs organize monthly compliance tests on the KCPs to continuously monitor the effectiveness of internal controls and publish test reports. GPOs optimize processes and internal controls based on business pain points to improve operational efficiency and help achieve business objectives. In addition, GPOs perform SACAs to assess the effectiveness of the overall process design and executional effectiveness of each business unit and then report the results to the Audit Committee.

Information & Communication

The company has established information and communication channels to ensure timely acquisition of information related to customers and suppliers, as well as other information. Huawei has established an online forum that provides a channel for employees to communicate with each other.

Corporate management holds regular meetings with departments at all levels to help them with operational issues and ensure that management decisions are effectively implemented. 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 all the up-to-date information is available to all employees. The company has established a mechanism for process owners at all levels to regularly communicate with one another, review the executional effectiveness of internal controls, and follow up on resolving internal control issues.

Monitoring

The company has established an internal complaint channel, an investigation mechanism, and an accountability system. We have clearly defined guidelines in the Agreement on Honesty and Integrity, which stipulates that, suppliers can report any improper conduct concerning Huawei employees through the channels provided in the agreement.

The Internal Audit Dept independently assesses the internal control effectiveness of the company and investigates any suspected violations of the BCG. The Internal Audit Dept reports the audit and investigation results to the Audit Committee and senior management.

Huawei has established an internal control appraisal and accountability system for GPOs and regional managers. The Audit Committee regularly reviews the internal control effectiveness of the company and considers reports on action plans for internal controls and the progress of plan execution. The Audit Committee has the right to request that the GPOs or top management of each business unit provide explanations for identified internal control issues and, if necessary, take corrective actions. The Audit Committee may also suggest that the Human Resources Committee take disciplinary action when necessary.