HSBC 2004 Annual Report Download - page 207

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indirectly, in any contract of significance with HSBC
Holdings or any of its subsidiary undertakings.
Board committees
The Board has appointed a number of committees
consisting of certain Directors, Group Managing
Directors and, in the case of the Corporate Social
Responsibility Committee, certain co-opted non-
director members. The following are the principal
committees:
Group Management Board
The Group Management Board meets regularly and
operates as a general management committee under
the direct authority of the Board. The members of
the Group Management Board are S K Green
(Chairman), Sir John Bond, W F Aldinger, D G
Eldon, D J Flint, M F Geoghegan and A W Jebson,
all of whom are executive Directors, and C-H
Filippi, S T Gulliver, Y A Nasr and J J Studzinski,
all of whom are Group Managing Directors.
The Group Management Board exercises the
powers, authorities and discretions of the Board in so
far as they concern the management and day to day
running of HSBC in accordance with such policies
and directions as the Board may from time to time
determine. Matters reserved for approval by the
Board include annual plans and performance targets,
procedures for monitoring and control of operations,
specified senior appointments, acquisitions and
disposals above predetermined thresholds and any
substantial change in balance sheet management
policy. The Group Management Board sub-delegates
credit, investment and capital expenditure authorities
to its members.
Group Audit Committee
The Group Audit Committee meets regularly with
HSBC’ s senior financial, internal audit, legal and
compliance management and the external auditor to
consider HSBC Holdings’ financial reporting, the
nature and scope of audit reviews and the
effectiveness of the systems of internal control and
compliance. The members of the Group Audit
Committee throughout 2004 were Sir Brian Moffat
(Chairman), R K F Ch’ ien and Sir John Kemp-
Welch. R A Fairhead was appointed a member of the
Committee with effect from 1 March 2004 and
J D Coombe has been appointed a member of the
Committee with effect from 1 July 2005. All
members of the Committee are independent non-
executive Directors.
The Board has determined that Sir Brian Moffat,
R A Fairhead and, with effect from 1 July 2005,
J D Coombe may be regarded as audit committee
financial experts for the purposes of section 407 of
the Sarbanes Oxley Act and as having recent and
relevant financial experience.
Since 2004 appointments to the Committee have
been made for periods of up to three years,
extendable by no more than two additional three-
year periods, so long as members continue to be
independent.
Formal and tailored induction programmes are
held for newly appointed Committee members and
appropriate training is provided on an ongoing and
timely basis.
There were seven meetings of the Group Audit
Committee during 2004. Sir John Kemp-Welch and
Sir Brian Moffat attended all of the meetings and
R K F Ch’ ien attended five. R A Fairhead attended
each of the five meetings held following her
appointment.
At the beginning of each meeting the Committee
meets with the external auditor, without management
present, to facilitate the discussion of any matter
relating to its remit and any issue arising from the
audit. Similar arrangements have been adopted for
the Committee to meet with the internal auditor.
The terms of reference of the Committee, which
are reviewed annually, are available on
www.hsbc.com by selecting ‘Investor Relations’ ,
then ‘Corporate Governance’ , then ‘Board
Committees’ .
The Group Audit Committee is accountable to
the Board and assists the Board in meeting its
responsibilities in ensuring an effective system of
internal control and compliance and for meeting its
external financial reporting obligations. The
Committee is directly responsible on behalf of the
Board for the selection, oversight and remuneration
of the external auditor. The Committee receives
frequent comprehensive reports from each of the
Head of Group Compliance, the Group General
Manager Legal and Compliance, the Group General
Manager Internal Audit and the Head of Group
Security and receives periodic presentations from
other functional heads and line management.
The Committee monitors the integrity of the
financial statements of HSBC Holdings, reviewing
significant financial reporting judgements contained
in them. During 2004 the Committee reviewed the
HSBC Holdings 2003 Results Announcement, the
Annual Report and Accounts 2003, the Annual
Review 2003, Interim Results 2004 Announcement
and the Interim Report 2004 before they were
submitted to the Board.