Steadily Promoting Corporate Governance
We continuously enhance our corporate governance, standardize operations, and optimize internal control and tax management systems, ensuring robust and steady business operations.
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Improving the Governance Structure
In terms of the appointment of the members of the Board of Directors, ZTE has nominated and selected directors in strict accordance with the requirements and procedures stipulated in the Articles of Association and the Working Rules of the Nomination Committee of the Board of Directors. To promote diversity, ZTE has formulated the Policy to Promote Diversity on the Board of Directors. Directors are appointed in consideration of multiple factors, including but not limited to age, gender, cultural and educational background, expertise, skill, and knowledge, to ensure open, fair, independent, and diversified appointment.
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Preventing and Controlling Operational Risks
ZTE has established an internal control system consisting of "three lines of defense," which covers the Board of Directors, Audit Committee, Internal Control Committee, Internal Control and Audit, and the internal control teams of business units. The Internal Control Committee is a company-level internal control management organization, which exercises the functions of decision-making, planning, supervision, and guiding of internal control. When setting new business goals or facing internal and external changes, ZTE arranges for business units to identify critical and major risks that may affect the fulfillment of goals, and requires each unit to evaluate the possibility and degree of impact of the risks with business experts. In addition, business units are required to formulate risk lists, conduct effective risk control, report the control progress on a monthly basis, and exclude the risks meeting the removal conditions from the lists after the evaluation and approval of business experts. At the end of every year, each business unit will review the critical or major risks not closed, in terms of their control progress, control effectiveness, and severity changes, and, based on the results of the review, decide on whether the risks shall be included in the next year's risk list for continued control.
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Enhancing Organizational Resilience through BCM
ZTE has set up the Business Continuity Management Committee. The Committee is headed by the COO and serves as the highest decision-making body for business continuity management of the company. The Business Continuity Management Office is established under the Committee to ensure the sustainable and effective operation of ZTE BCM system through regular meetings, management reviews, incident management, etc. In 2023, ZTE focused on 14 key BCM improvement tasks, including key supplier resilience enhancement, identification of risks in key materials and exclusive suppliers, cybersecurity control, action planning for cross-field cybersecurity protection, and optimization of product certification management processes. In 2023, ZTE secured the ISO 22301 certification for BCM, which was first obtained in 2019. The certification scope covers ZTE's main manufacturing bases and R&D centers.
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Staying Compliant and Transparent in Tax Management
Attaching great importance to tax governance and transparency, ZTE has set up the Global Tax Compliance Committee to coordinate tax compliance management. Led by the company's CFO, the Committee works closely with business teams to ensure that all tax-related activities are carried out in an orderly and compliant manner. In 2023, ZTE implemented tax risk management with focus on the following key aspects: examination and review of tax declaration, digital tax management, full coordination between accounting and tax management, comprehensive management of income taxes, comprehensive management of transfer pricing by overseas subsidiaries. Additionally, ZTE's Taxation Capability Center has been actively engaged in the interpretation and analysis of the latest global fiscal and tax policies, and maintaining dynamic communication with internal and external organizations, thereby providing strong support for the company's tax compliance. ZTE has been graded "A-level" in tax credit rating for years in succession, signifying recognition from regulatory agencies for its tax management capabilities.
Stakeholder Communication and Engagement
ZTE attends to stakeholders' concerns and requirements, and maintain extensive and sincere communication via diverse channels to address their concerns.
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Shareholders and Investors
Who were the representatives?
· Investors
What were the key topics raised?
· Corporate business and fundamentals
· Long-term development plans, financial performance, and ESG performance
· Corporate governance and risk control
· Communication and interaction with investorsHow did we engage with them?
· Regular information disclosure
· General Meeting of Shareholders
· Investor roadshows and meetings
· Hotline and mailbox -
Regulators
Who were the representatives?
· Governments at various levels and competent authorities
· Shenzhen Stock Exchange
· Hong Kong Stock Exchange
· China Securities Regulatory CommissionWhat were the key topics raised?
· Compliant operations
· Dual-carbon strategy and climate change
· Protection of the rights and interests of stakeholders such as customers and employees
· Technology ethics
· Stable product operation
· Contribution to economic growthHow did we engage with them?
· Relevant meetings
· Industry associations and other institutions -
Customers
Who were the representatives?
· Relevant operators in China and abroad
· ConsumersWhat were the key topics raised?
· Excellent product performance
· Information security and privacy protection
· Green product standards
· Timely and efficient customer services
· Overall CSR performanceHow did we engage with them?
· Presales communication
· Aftersales services
· Regular communication (such as customer visits)
· High-end exhibitions
· Third-party training
· Customer review -
Employees
Who were the representatives?
· All employees
What were the key topics raised?
· Compensation and benefits
· Comprehensive capability building
· Open and transparent career development paths
· Work-life balance
· Steady corporate development
· Healthy and safe workplaceHow did we engage with them?
· Trade Union
· Online communication platforms
· Employee complaint hotline
· Employee Assistance Program (EAP)
· Employee representative
· Face-to-face talks with the senior management and other internal activities -
Employees' Families
Who were the representatives?
· All employees' families
What were the key topics raised?
· Employee health and safety
· Employee developmentHow did we engage with them?
· Open day for employee families
· Activities for caring employees' families
· EAP -
Suppliers
Who were the representatives?
· All suppliers
What were the key topics raised?
· Open and transparent selection procedures
· Steady financial performance and reasonable payment policies
· Long-standing and steady partnership
· Fair, equal, open, and transparent procurement environmentHow did we engage with them?
· ZTE Global Partners Day
· Supplier training
· Onsite review and communication
· Regular visits
· High-level exchanges -
Communities
Who were the representatives?
· Villages and towns around ZTE factories
· Areas that receive assistance
· Global communityWhat were the key topics raised?
· Contribution to the sustained development of communities
· Sharing of the outcomes from corporate developmentHow did we engage with them?
· Face-to-face communication
· Public welfare activities
· Complaint hotline -
Social Organizations
Who were the representatives?
· Universities and research institutes, and ESG rating organizations
· Media
· NGO
· Industry associationsWhat were the key topics raised?
· Sound partnership
· Timely sharing of experience and practices
· Transparent information communication and sharing
· Common growth across the industryHow did we engage with them?
· Press conferences
· Regular communication and feedback
· Project collaboration
· ZTE official website, official accounts on social media, and other public channels
