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2011/12 Annual Report Lenovo Group Limited 35
CORPORATE GOVERNANCE CODE
COMPLIANCE
Throughout the year ended March 31, 2012, the Company
has complied with the code provisions of the Code on
CorporateGovernancePractices(the“CG Code”)set
out in Appendix 14 to the Rules Governing the Listing of
Securities on The Stock Exchange of Hong Kong Limited
(the“Listing Rules”),andwhereappropriate,metthe
recommended best practices in the CG Code, save for the
deviations which are explained below.
Code A.2.1
Under Code A.2.1, the roles of chairman and chief
executive officer should be separated and should not be
performed by the same individual. Following the resignation
of Mr. Liu Chuanzhi on November 3, 2011, Mr. Yang
Yuanqing(“Mr. Yang”)hasbeenappointedasthechairman
oftheBoard(the“Chairman”)andhasperformedboth
the roles as the Chairman and chief executive officer of the
Company(the“CEO”).TheBoardisoftheopinionthatitis
appropriate and in the best interests of the Company at the
present stage for Mr. Yang to hold both the positions as it
helps to maintain the continuity of the policies and stability
of the operations of the Company. The Board comprising a
vast majority of non-executive directors meets regularly on
a quarterly basis to review the operations of the Company
led by Mr. Yang. Accordingly, the Board believes that this
arrangement will not have negative influence on the balance
of power and authorizations between the Board and the
management of the Company.
Code A.4.1
Code A.4.1 of the CG Code articulates that non-executive
directors should be appointed for a specific term, subject
to re-election. In February 2012, all the non-executive
directors (including independent non-executive directors)
have entered into letters of appointment with the Company
for a term of three years subject to retirement by rotation as
provided for in the articles of association of the Company
(the“Articles of Association”).
Code E.1.2
Mr. Liu Chuanzhi, the former Chairman was unable to
attend the Company’s annual general meeting which was
held on July 22, 2011 as he had an engagement that was
important to the businesses of the Company.
Apart from the foregoing, the Company met the
recommended best practices in the CG Code as disclosed
in the respective sections of this report. Particularly, the
Company published quarterly financial results and business
review in addition to interim and annual results. Quarterly
financial results enhanced the shareholders to assess
the performance, financial position and prospects of the
Company. The quarterly financial results were prepared
using the accounting standards consistent with the policies
applied to the interim and annual accounts.
THE BOARD
Board Composition
As at the date of this annual report, there were eleven
Board members consisting of one executive director, four
non-executive directors and six independent non-executive
directors. Accordingly, non-executive directors accounted
for a vast majority of the Board members whereas the
independent non-executive directors represented more
than one-third of the Board members, thus exhibiting a
strong independent element which enhanced independent
judgement. Mr. Nicholas C. Allen, an independent non-
executive director of the Company, has the appropriate
professional qualifications, or accounting or related financial
management expertise as required under the Listing Rules.
Board Composition
9%
36%55%
Executive Director
Non-Executive Directors
Independent Non-Executive Directors