HSBC 2009 Annual Report Download - page 311

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provisions or (in the case of provisions whose
requirements are of a continuing nature) complied
for only part of an accounting period covered by the
report, must specify the Code provisions with which
it has not complied, and (where relevant) for what
part of the reporting period such non-compliance
continued, and give reasons for any non-compliance.
As stated above, HSBC Holdings complied
throughout 2009 with the applicable code provisions
of the Combined Code. The Combined Code does
not require HSBC Holdings to disclose the full range
of corporate governance guidelines with which it
complies.
Under NYSE standards, companies are required
to have a nominating/corporate governance
committee, composed entirely of independent
directors. In addition to identifying individuals
qualified to become Board members, this committee
must develop and recommend to the Board a set of
corporate governance principles. HSBC’s
Nomination Committee complies with the Combined
Code, which requires a majority of members to be
independent. All four members of the Committee
during 2009 were independent non-executive
Directors. On 26 February 2010, S K Green, Group
Chairman, became chairman of the Nomination
Committee in succession to Sir Brian Williamson,
who continues to serve as a member of the
Committee. The Committee’s terms of reference do
not require the Committee to develop and
recommend corporate governance principles for
HSBC Holdings. As stated above, HSBC Holdings is
subject to the corporate governance principles of the
Combined Code.
Pursuant to NYSE listing standards, non-
management directors must meet on a regular basis
without management present and independent
directors must meet separately at least once per year.
During 2009, HSBC Holdings’ non-executive
Directors met four times as a group with the Group
Chairman, but without other executive Directors
present, and met once as a group without the Group
Chairman or other executive Directors present.
HSBC Holdings’ practice, in this regard, complies
with the Combined Code.
In accordance with the requirements of the
Combined Code, HSBC Holdings discloses in its
annual report how the Board, its committees and the
Directors are evaluated (on page 306) and provides
extensive information regarding Directors’
compensation in the Directors’ Remuneration Report
(on pages 334 to 348). The terms of reference of
HSBC Holdings’ Audit, Nomination, Remuneration
and Risk Committees are available at
www.hsbc.com/boardcommittees.
NYSE listing standards require US companies
to adopt a code of business conduct and ethics for
directors, officers and employees, and promptly
disclose any waivers of the code for directors or
executive officers. In December 2009, the Board
endorsed three Group Values statements underpinned
by the continued use of HSBC’s Business Principles,
in replacement of the Group Business Principles and
Values. In addition to the Group Values statements
and Business Principles (and previously the Group
Business Principles and Values), which apply to the
employees of all HSBC companies, pursuant to the
requirements of the Sarbanes-Oxley Act the Board of
HSBC Holdings has adopted a Code of Ethics
applicable to the Group Chairman and the Group
Chief Executive, as the principal executive officers,
and to the Chief Financial Officer, Executive
Director, Risk and Regulation and Group Chief
Accounting Officer. HSBC Holdings’ Code of Ethics
is available on www.hsbc.com/codeofethics or from
the Group Company Secretary at 8 Canada Square,
London E14 5HQ. If the Board amends or waives
the provisions of the Code of Ethics, details of the
amendment or waiver will appear at the same
website address. During 2009, HSBC Holdings made
no amendments to its Code of Ethics and granted no
waivers from its provisions. The references to the
standards to be followed by all employees have been
updated to reflect the Board’s endorsement of Group
Values statements underpinned by the continued use
of HSBC’s Business Principles. The Group Values
statements and Business Principles are available on
www.hsbc.com/groupvalues.
Under NYSE listing rules applicable to US
companies, independent directors must comprise a
majority of the Board of directors. Currently, two
thirds of HSBC Holdings’ Directors are independent.
Under the Combined Code the HSBC Holdings
Board determines whether a Director is independent
in character and judgement and whether there are
relationships or circumstances which are likely to
affect, or could appear to affect, the Director’s
judgement. Under the NYSE rules a director cannot
qualify as independent unless the board affirmatively
determines that the director has no material
relationship with the listed company; in addition the
NYSE rules prescribe a list of circumstances in
which a director cannot be independent. The
Combined Code requires a company’s board to
assess director independence by affirmatively
concluding that the director is independent of
management and free from any business or other
relationship that could materially interfere with the
exercise of independent judgement.