HSBC 2008 Annual Report Download - page 298

HSBC HOLDINGS PLC
Report of the Directors: Governance (continued)
Board of Directors > Board committees
296
HSBC Holdings is required to submit annual
and interim written affirmations of compliance with
applicable NYSE corporate governance standards,
similar to the affirmations required of NYSE-listed
US companies.
Board committees
The Board has appointed a number of committees
consisting of certain Directors, Group Managing
Directors and, in the case of the Corporate
Sustainability Committee, certain co-opted
non-director members. The following are the
principal committees:
Group Management Board
The Group Management Board meets frequently and
operates as a general management committee under
the direct authority of the Board. The objective of
the Group Management Board is to maintain a
reporting and control structure whereby all of the
line operations of HSBC are accountable to
individual members of the Group Management
Board who report to the Group Chief Executive who
in turn reports to the Group Chairman. The Board
has set objectives and measures for the Group
Management Board. These will align senior
executives’ objectives and measures with the
strategy and operating plans throughout HSBC.
The members of the Group Management Board are
M F Geoghegan (Chairman), V H C Cheng,
D J Flint, A A Flockhart and S T Gulliver who are
executive Directors, and A Almeida, E Alonso,
C C R Bannister, K M Harvey, A C Hungate,
D D J John, B P McDonagh, Y A Nasr, B Robertson
and P A Thurston, 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 Holdings in accordance with such
policies and directions as the Board may from time
to time determine. Matters reserved for approval by
the Board are described on page 290.
The Group Chief Executive reports to each
meeting of the Board on the activities of the Group
Management Board.
Group Audit Committee
The Group Audit Committee meets regularly with
HSBC’s senior financial, credit and risk, 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, compliance and risk management.
The members of the Group Audit Committee
throughout 2008 were, R A Fairhead (Chairman),
J D Coombe and J W J Hughes-Hallett. J R Lomax
was appointed a member of the Committee on
1 March 2009. S W Newton retired as a Director of
HSBC Holdings and ceased to be a member of the
Committee on 10 October 2008. All members of the
Committee are independent non-executive Directors.
The Board has determined that R A Fairhead,
J D Coombe and J W J Hughes-Hallett are
independent according to SEC criteria, may be
regarded as audit committee financial experts for the
purposes of section 407 of the Sarbanes-Oxley Act
and have recent and relevant financial experience.
Appointments to the Committee are 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 eight meetings of the Group Audit
Committee during 2008. The table on page 291 gives
details of Directors’ attendance at these meetings.
Following each meeting the Committee reports to
the Board on its activities.
At each meeting, the Committee has the
opportunity to meet 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 Committee also has the
opportunity to meet with the Group Chief Executive
at each of its meetings.
The terms of reference of the Committee,
which are reviewed annually, are available at
www.hsbc.com/boardcommittees. To ensure
consistency of scope and approach by subsidiary
company audit committees, the Group Audit
Committee has established core terms of reference to
guide subsidiary company Boards when adopting
terms of reference for their audit committees.
Subsidiary company audit committees are required
to provide bi-annual certificates to the Committee or
to an intermediate subsidiary company audit
committee, relating to the financial statements and
internal control procedures of the relevant subsidiary
company.
The Group Audit Committee is accountable to
the Board and assists it in meeting its responsibilities