HSBC 2011 Annual Report Download - page 229

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Overview Operating & Financial Review Corporate Governance Financial Statements Shareholder Information
the non-executive Directors, particularly those who
serve as members of Board committees.
The Nomination Committee regularly reviews
the structure, size and composition of the Board
(including the skills, knowledge and experience
required of Directors) necessary to address and
challenge adequately key risks and issues that
confront, or may confront, the Board and makes
recommendations to the Board with regard to any
changes. The Nomination Committee maintains a
forward-looking schedule of potential candidates as
Directors that takes into account the needs and
developments of the Group’s businesses and the
expected retirement dates of existing Directors.
The Board considers all of the non-executive
Directors to be independent in character and
judgement. The Board has determined S A Catz,
L M L Cha, M K T Cheung, J D Coombe,
J Faber, R A Fairhead, J W J Hughes-Hallett,
W S H Laidlaw, J P Lipsky, J R Lomax, G Morgan,
N R N Murthy, Sir Simon Robertson, J L Thornton
and Sir Brian Williamson to be independent. The
Board has determined L M L Cha to be independent.
Her role as deputy chairman of, and former role as
corporate relations adviser to, The Hongkong and
Shanghai Banking Corporation, were considered not
to be material. When determining independence the
Board considers that calculation of the length of
service of a non-executive Director begins on the
date of his or her first election by shareholders as a
Director of HSBC Holdings. Given the complexity
and geographical spread of our business, the
experience of previous service on a subsidiary
company board can be a considerable benefit and
does not detract from a Director’s independence. In
reaching its determination of each non-executive
Director’s independence the Board has concluded
that there are no relationships or circumstances
which are likely to affect a Director’s judgement and
any relationships or circumstances which could
appear to do so were considered not to be material.
In accordance with the Rules Governing the
Listing of Securities on the Stock Exchange of
Hong Kong Limited, each non-executive Director
determined by the Board to be independent has
provided an annual confirmation of his or her
independence to HSBC Holdings.
Information and support
The Board regularly reviews reports on progress
against financial objectives, business developments
and investor and external relations. The chairmen of
Board committees and the Group Chief Executive
report to each meeting of the Board on the activities
of the committees since the previous Board meeting.
The Board receives regular reports and presentations
on strategy and developments in the global
businesses and principal geographical areas. Regular
reports are also provided to the Board and Board
committees on the Group’s risk appetite profile,
top and emerging risks, risk management, credit
exposures and the Group’s loan portfolio, asset
and liability management, liquidity, litigation,
compliance and reputational issues. The agenda and
supporting papers are distributed in advance of all
Board and committee meetings to allow time for
appropriate review and to facilitate full discussion
at the meetings. All Directors have full and timely
access to all relevant information and may take
independent professional advice if necessary at the
Company’s expense.
The Directors have free and open contact with
management at all levels. Group Managing Directors
and Group General Managers meet informally with
Directors after Board meetings. When attending
Board offsites and when travelling for other reasons,
non-executive Directors are encouraged to take
opportunities to see business operations at first hand
and to meet management.
Non-executive Directors have an open invitation
to attend meetings of the GMB and the Risk
Management Meeting to further enhance their
understanding and awareness of our businesses and
the senior leadership team.
Induction and ongoing development
Full, formal and tailored induction programmes,
with particular emphasis on the systems of risk
management and internal controls, are arranged for
newly appointed Directors. The programmes consist
of a series of meetings with other Directors and
senior executives to enable new Directors to
familiarise themselves with our strategy, risk
appetite, operations and internal controls. Directors
also receive comprehensive guidance on directors’
duties and liabilities. As part of the induction process
the Group Company Secretary will coordinate the
production of a development programme based
on the individual Director’s needs. Induction
programmes are also arranged for newly appointed
members of committees.
Directors are given opportunities to update
and develop their skills and knowledge, through
briefings by senior executives and externally run
seminars throughout their directorship and while
serving on committees. Focused in-house
development programmes to enhance business
awareness are arranged in conjunction with