The Board is responsible for supervising the Management of the business and affairs of the Group with due regard to maximising shareholder value and enhancing corporate governance standard of the Group. The Board is obliged to act honestly and in good faith and to make decisions objectively in the best interests of the Group and its shareholders as a whole.

Summary of the Board of Directors Mandate

The Board of the Company is composed of majority of Non-executive Directors and Independent Non-executive Directors that ensures the independence and objectivity of the decisions of the Board, as well as comprehensive and impartial control of the Management. The Board acts honestly and in good faith so that decisions are made objectively with a view to delivering long-term and maximum shareholder value and fulfilling its corporate responsibility to other stakeholders of the Group.

The Board currently has twelve  members, comprising six Independent Non-executive Directors, four Non-executive Directors and two Executive Directors. Mr. XIAO Gang resigned as Chairman and Non-executive Director of the Company on 17 March 2013; and Mr. NING Gaoning was appointed as an Independent Non-executive Director of the Company on 24 August 2012. Save as disclosed above, there were no other changes to the composition of the Board in 2012 and up to the date of this Annual Report.

Under the current board membership, all Directors possess extensive experience in banking and management. In addition, over one-third of them are Independent Non-executive Directors, of whom some of them are experts in financial and/or risk management. The Board has adopted the “Policy on Independence of Directors” (the “Independence Policy”) which stipulates the criteria on independence of Independent Non-executive Directors. The Company has received from each of the Independent Non-executive Directors an annual confirmation of his independence by reference to the Independence Policy. Based on the information available to the Company, it considers that all of the Independent Non-executive Directors are independent. For biographical details of the Directors, please refer to  "Board of Directors" and "Senior Management".

All the existing Non-executive Directors and Independent Non-executive Directors of the Company have been appointed for a fixed term of approximately 3 years, with formal letters of appointment setting out the key terms and conditions of their appointment. In accordance with Article 98 of the Articles of Association and pursuant to Code A.4.2 of the Corporate Governance Code, Mr. LI Lihui, Mr. GAO Yingxin, Mr. SHAN Weijian and Mr. TUNG Chee Chen will retire by rotation at the forthcoming annual general meeting. Mr. TUNG Chee Chen has notified the Company that he has decided not to stand for re-election at the forthcoming annual general meeting. The other three retiring Directors, being eligible, will offer themselves for re-election. Further, pursuant to the Articles of Association, any Director appointed by the Board during the year shall hold office only until the next following annual general meeting of the Company, and shall then be eligible for re-election at such meeting. Accordingly, Mr. NING Gaoning, being a Director appointed on 24 August 2012, shall retire at the forthcoming annual general meeting and, being eligible, offer himself for re-election. Further details regarding the proposed re-election of Directors are set out in the section headed “Report of the Directors” of this Annual Report. In addition, the Nomination and Remuneration Committee has also established a written and formal process for the appointment of Independent Non-executive Directors to ensure that the appointment procedures are standardised, thorough and transparent.

 
Prior to Mr. XIAO Gang’s resignation on 17 March 2013, he was the Chairman and an Executive Director of BOC. Mr. LI Lihui and Mr. LI Zaohang are Executive Directors of BOC. Mr. ZHOU Zaiqun was a former Executive Director and Executive Vice President of BOC (he ceased to be an Executive Director and Executive Vice President of BOC with effect from 28 May 2011). Mr. CHEN Siqing is an Executive Vice President of BOC. Save as disclosed above, there are no other relationships between the Board members, including financial, business, family or other material/relevant relationships.

In addition, it is expressly provided in the Board’s Mandate that, unless the applicable laws or regulations allow otherwise, if a substantial shareholder or Director has a conflict of interest in the matter to be considered by the Board, a Board meeting must be convened and attended by Independent Non-executive Directors who have no material interest, and give professional advice to the subject matter for further consideration and approval.

During the year, the Company has arranged for appropriate cover on Directors’ Liability Insurance Policy to indemnify the Directors for liabilities arising from the corporate activities. The coverage and the amount insured under such policy are reviewed annually by the Company.

To ensure the newly appointed Directors to have adequate understanding of the Company’s business operations and to enable all Directors to update their knowledge regularly so as to provide informed recommendation and advice and make contribution to the Company, the Board establishes a set of written policy specifying guidelines on Directors’ induction and training upon appointment.

The Company also provides regular updates to Board members on material changes to regulatory requirements applicable to the Directors and the Company on a timely basis; and arranges regular meetings with the Management to facilitate the understanding of the latest business development of the Company. In addition, Board members are encouraged to participate actively in continuous training programmes. The Company also arranges relevant professional training programmes for Board members at Company’s expense. In 2012, the Company invited Mr. CAO Yuanzheng, Chief Economist of BOC, to deliver a seminar to the Directors and senior management with regard to the trend and outlook of macro-economic in Mainland China, and the reform of international monetary system and RMB Internationalisation.

During the year, all Directors have participated in continuous professional development to develop and refresh their knowledge and skills in accordance with Code A.6.5 contained in Appendix 14 to the Listing Rules. Each of the Directors received a series of training locally or overseas as he thought fit, relevant trainings and briefings included, among others:

– development of national and global economy;

– national policy outlook;

– corporate governance;

– regulatory updates; and

– banking industry development trend, etc.

All of them have also provided to the Company their records of training received for the year, the information of which has been entered in the register of directors’ training records maintained and updated by the Company from time to time. The following summarises the compliance status of all Directors of the Company in respect of Code A.6.5 during the year:

Directors	In compliance with Code A.6.5
Non-executive Directors
Mr. XIAO Gang (Chairman) (Note 1)	V
Mr. LI Lihui (Vice Chairman)	V
Mr. LI Zaohang	V
Mr. ZHOU Zaiqun	V
Mr. CHEN Siqing	V
Independent Non-executive Directors
Dr. FUNG Victor Kwok King	V
Mr. KOH Beng Seng	V
Mr. NING Gaoning (Note 2)	V
Mr. SHAN Weijian	V
Mr. TUNG Chee Chen	V
Mr. TUNG Savio Wai-Hok	V
Executive Directors
Mr. HE Guangbei (Vice Chairman and Chief Executive)	V
Mr. GAO Yingxin	V

Seven Board meetings were held during 2012 with an average attendance rate of 93%. The meeting schedule for the year was prepared and approved by the Board in the preceding year. In general, Board agenda and meeting materials are despatched to all Board members for review at least seven days prior to the scheduled meetings. Board agenda is approved by the Chairman following consultation with other Board members and the senior management. In addition, in order to facilitate open discussion with all Non-executive Directors, the Chairman meets with all Non-executive Directors (including Independent Non-executive Directors), in the absence of Executive Directors and the senior management, during the discussion session before each Board meeting. Relevant practice has been incorporated in the Working Rules of the Board.

 
In 2012, details of respective Directors’ attendance at the Board meetings are set out as follows:

Director	Number of Board meetings attended	Attendance rate
Non-executive Directors
Mr. XIAO Gang (Chairman) (Note 1)	6 out of 7	86%
Mr. LI Lihui (Vice Chairman)	7 out of 7	100%
Mr. LI Zaohang	7 out of 7	100%
Mr. ZHOU Zaiqun	7 out of 7	100%
Mr. CHEN Siqing	6 out of 7	86%
Independent Non-executive Directors
Dr. FUNG Victor Kwok King	5 out of 7	71%
Mr. KOH Beng Seng	7 out of 7	100%
Mr. NING Gaoning (Note 2)	0 out of 2	0%
Mr. SHAN Weijian	7 out of 7	100%
Mr. TUNG Chee Chen	7 out of 7	100%
Mr. TUNG Savio Wai-Hok	7 out of 7	100%
Executive Directors
Mr. HE Guangbei (Vice Chairman and Chief Executive)	7 out of 7	100%
Mr. GAO Yingxin	7 out of 7	100%

Note 1: Mr. XIAO Gang resigned as Chairman and Non-executive Director of the Company with effect from 17 March 2013.
Note 2: Mr. NING Gaoning was appointed as an Independent Non-executive Director of the Company with effect from 24 August 2012.

Apart from formal Board meetings and annual general meetings, the Company arranges, on a regular basis, other casual events for the Board members and the senior management to facilitate their communication and interactions. For example, the Company organises breakfast meetings from time to time, Board members and senior management have been invited to join and share insights on the Company’s business and strategic issues. Further, a board retreat has also been held during the year to enhance communication between the Board and the senior management.