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China Mobile AGM speech

Good morning Chairman, Directors of the Board and the executive team,

My name is Christine Chow. I am an Associate Director in the Engagement team of Hermes Investment Management. Our stewardship platform represent more than 40 institutional investors with over US$300 billion of assets, 28 of whom are shareholders in China Mobile.

Firstly, we welcome the significant improvements made by the company in ESG disclosure, especially over the last year.  The company has attained Band A in CDP’s climate change disclosure survey (Environment), published a policy and corresponding due diligence guide for responsible supply chain (Social) and publicly disclosed the terms of reference of the nomination committee (Governance).

We are however disappointed to see that the disclosure on dividend strategy has not yet met our expectations.  We would appreciate clear guidance on China Mobile’s overall approach to the use of cash which covers both strategic investment for growth and the free cash for rewarding shareholders. As a representative of long term investors, we would like to see improved disclosure on the long term strategic development of the company that supports the efficient use of resources, not just the dividend payout.

My question for the board is as follows,

’Since the board evaluation, we have seen initial changes in board composition. However, the telecoms industry is going through revolutionary changes. Given the company’s top 3 materiality issues are network quality, information security and privacy and customer rights protection (as outlined in the 2016 sustainability report), what additional talents do you plan to bring to the board in the next 3-5 years?  We appreciate that Paul Chow with experience at Cybersport, was brought in a few years ago, but how do you plan to bring in additional talents?

Global companies tend to create a skill matrix when evaluating board refreshment requirements.  Has the company conducted a matrix for planning as well? Thank you.’

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