HSBC 2008 Annual Report Download - page 296

HSBC HOLDINGS PLC
Report of the Directors: Governance (continued)
Board of Directors > Conflicts of interest / Corporate governance / NYSE practices
294
should they have concerns which contact through the
normal channels of Group Chairman, Group Chief
Executive, Group Finance Director or other
executives has failed to resolve or for which such
contact would be inappropriate. Invitations to meet
S M Robertson prior to his appointment as senior
independent non-executive Director were extended
to the Group’s largest shareholders. The senior
independent non-executive Director may be
contacted through the Group Company Secretary
at 8 Canada Square, London E14 5HQ.
Conflicts of interest, indemnification of
Directors, relevant audit information and
contracts of significance
One of the amendments to HSBC Holdings’ Articles
of Association approved by shareholders at the 2008
Annual General Meeting gave the Board authority,
with effect from 1 October 2008, to approve
Directors’ conflicts and potential conflicts of
interest. The Board has adopted a policy and
procedures for the approval of Director’s conflicts or
potential conflicts of interest. The Board’s powers to
authorise conflicts are operating effectively and the
procedures are being followed. A review of
situational conflicts which have been authorised,
including the terms of authorisation, will be
undertaken annually.
The Articles of Association of HSBC Holdings
provide that Directors are entitled to be indemnified
out of the assets of the Company against claims from
third parties in respect of certain liabilities arising in
connection with the performance of their functions,
in accordance with the provisions of the UK
Companies Act 2006. Such indemnity provisions
have been in place during the financial year but have
not been utilised by the Directors.
Each person who is a Director at the date of
approval of this report confirms that so far as the
Director is aware, there is no relevant audit
information of which the Company’s auditor is
unaware; and the Director has taken all the steps that
he or she ought to have taken as a Director in order
to make himself or herself aware of any relevant
audit information and to establish that the
Company’s auditor is aware of that information. This
confirmation is given pursuant to section 234ZA of
the UK Companies Act 1985 and should be
interpreted in accordance therewith and subject to
the provisions thereof.
None of the Directors had, during the year or at
the end of the year, a material interest, directly or
indirectly, in any contract of significance with HSBC
Holdings or any of its subsidiary undertakings.
Corporate governance codes
HSBC is committed to high standards of corporate
governance. HSBC Holdings has complied
throughout the year with the applicable code
provisions of the Combined Code on Corporate
Governance issued by the Financial Reporting
Council and the Code on Corporate Governance
Practices in Appendix 14 to the Rules Governing the
Listing of Securities on The Stock Exchange of
Hong Kong Limited.
The Board of HSBC Holdings has adopted a
code of conduct for transactions in HSBC Group
securities by Directors that complies with The Model
Code in the Listing Rules of the Financial Services
Authority and with The Model Code for Securities
Transactions by Directors of Listed Issuers (‘Hong
Kong Model Code’) set out in the Rules Governing
the Listing of Securities on The Stock Exchange of
Hong Kong Limited, save that The Stock Exchange
of Hong Kong Limited has granted certain waivers
from strict compliance with the Hong Kong Model
Code, primarily to take into account accepted
practices in the UK, particularly in respect of
employee share plans. Following a specific enquiry,
each Director has confirmed he or she has complied
with the code of conduct for transactions in HSBC
Group securities throughout the year.
Differences in HSBC Holdings/New York
Stock Exchange corporate governance
practices
Under the NYSE’s corporate governance rules for
listed companies and the applicable rules of the SEC,
as a NYSE-listed foreign private issuer, HSBC
Holdings must disclose any significant ways in
which its corporate governance practices differ from
those followed by US companies subject to NYSE
listing standards. HSBC Holdings believes the
following to be the significant differences between
its corporate governance practices and NYSE
corporate governance rules applicable to US
companies.
US companies listed on the NYSE are required
to adopt and disclose corporate governance
guidelines. The Listing Rules of the UK Financial
Services Authority require each listed company
incorporated in the UK to include in its Annual
Report and Accounts a narrative statement of how it
has applied the principles of the Combined Code and
a statement as to whether or not it has complied with
the code provisions of the Combined Code
throughout the accounting period covered by the
Annual Report and Accounts. A company that has
not complied with the Code provisions, or complied