HSBC 2009 Annual Report Download - page 312

HSBC HOLDINGS PLC
Report of the Directors: Governance (continued)
Board of Directors > Board committees
310
Lastly, a chief executive officer of a US
company listed on the NYSE must annually certify
that he or she is not aware of any violation by the
company of NYSE corporate governance standards.
In accordance with NYSE listing rules applicable to
foreign private issuers, HSBC Holdings’ Group
Chief Executive is not required to provide the NYSE
with this annual compliance certification. However,
in accordance with rules applicable to both US
companies and foreign private issuers, the Group
Chief Executive is required promptly to notify the
NYSE in writing after any executive officer becomes
aware of any material non-compliance with the
NYSE corporate governance standards applicable to
HSBC Holdings.
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 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), D J Flint, A A Flockhart and
S T Gulliver, who are executive Directors, and
A Almeida, E Alonso, K M Harvey, A C Hungate,
B P McDonagh, B Robertson, P A Thurston and
P T S Wong, 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 303.
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 2009 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. On 1 March 2010, M K T Cheung
was appointed a member of the Committee in
succession to J W J Hughes-Hallett. All members of
the Committee are independent non-executive
Directors.
The Committee has discussed the risk
management recommendations of the Walker
Review. Following the Committee’s recommendation
of appropriate terms of reference, a separate Group
Risk Committee was established by the Board on
26 February 2010. The terms of reference of the
Group Risk Committee are available at
www.hsbc.com/boardcommittees. The members of
the Group Risk Committee are R A Fairhead
(Chairman), J D Coombe, J W J Hughes-Hallett and
J R Lomax, all of whom are independent non-
executive Directors. The following section on the
work of the Group Audit Committee describes its
activities and responsibilities up to the establishment
of the Group Risk Committee. Going forward the
Group Audit Committee will focus primarily on
financial reporting matters and the Group Risk
Committee on internal control and risk management
matters.
The Board has determined that M K T Cheung,
J D Coombe, R A Fairhead, J W J Hughes-Hallett
and J R Lomax are independent according to SEC
criteria. In addition, M K T Cheung, J D Coombe,
R A Fairhead, and J W J Hughes-Hallett 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