HSBC 2012 Annual Report Download - page 317

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Overview Operating & Financial Review Corporate Governance Financial Statements Shareholder Information
committees of the Board at which briefings
were given on the regulatory environment and
developments in regulatory and accounting
requirements and risk, the risk control frameworks
for the global businesses, Group recovery and
resolution planning and legal and regulatory reform.
Participated in a risk workshop co-hosted by HSBC
and Cambridge University Centre for Risk Studies
and in the annual forum for HSBC Group non-
executive directors.
Sir Simon Robertson
Attended bespoke briefings on prudential regulation,
GPB, GB&M, Legal (including US regulatory
matters), and Strategy and Planning. Attended a
briefing from the external auditor on its role in the
Group’s financial reporting. Develops and refreshes
knowledge of the Group’s businesses and operations
through regular interactions with, and receipt of
briefings from, the Group Chairman and Group
Chief Executive. Participated in the annual forum
for HSBC Group non-executive directors.
J L Thornton
Attended bespoke briefings on prudential regulation
and anti-money laundering and compliance.
Attended meetings of the Group Remuneration
Committee at which briefings were given on
regulatory developments in executive remuneration.
As chairman of HSBC North America Holdings Inc.
attended board meetings at which briefings were
given on: the Dodd-Frank Act; key US strategic
considerations comprising the transformation of the
US business (including regulatory and remediation
planning, business disposals and demise, core
business re-engineering and changing the culture);
and the Group’s global businesses in the US
including, in particular, the US consumer and
mortgage lending business.
Performance evaluation
In September 2012, Bvalco Ltd was commissioned
to facilitate and report on the review of effectiveness
of the Board, with particular focus on the
effectiveness of committees and their interaction
with the Board, the relationship and information
flows between the subsidiaries and the Board, the
balance of skills on the Board and the level of time
commitment required from Directors. A legal firm
which is engaged from time to time by the Company
to provide legal services holds a 20% shareholding
in Bvalco Ltd. Bvalco Ltd has confirmed that it does
not have any other connection with the Company.
Bvalco’s report was prepared following interviews
with Directors and senior members of management
and a review of relevant documents. Factors assessed
during Bvalco’s review included the Group’s culture,
handling of reputational issues, composition of the
Board, effectiveness of the Group Chairman,
interaction between Board members and
management, and Board Committee structure.
Bvalco’s evaluation of the Board considered
the balance of skills, experience, independence
and knowledge of the Company on the Board, its
diversity, including gender, how the Board works
together as a unit and other factors relevant to its
effectiveness.
The Bvalco report concluded that the Board
operates effectively with a number of important
strengths. The report is used by the Board in its
annual evaluation of its own performance and that
of its committees and by the Group Chairman in his
review of the individual performance of Directors.
The Board will monitor implementation of actions
arising from its 2012 performance evaluation. All
actions arising from the Board’s 2011 performance
evaluation have been implemented.
It is the intention of the Board to continue to
undertake an evaluation of its performance and that
of its committees and individual Directors annually,
with external input to the process at least every third
year.
Formal evaluation of the individual performance
of each Director is undertaken annually by the Group
Chairman using the findings of the performance
evaluation process undertaken by the Board and, as
appropriate, the records of training and development
activities undertaken by Directors. During this
evaluation, the Group Chairman discusses the
contribution of the Director and the time spent by
them in performing their responsibilities. The
Group Chairman has confirmed that all of the non-
executive Directors continue to perform effectively
and to demonstrate commitment to their roles.
The non-executive Directors, led by the Deputy
Chairman and senior independent non-executive
Director, are responsible for the evaluation of the
performance of the Group Chairman.
Appointment, retirement and re-election of
Directors
The Board may at any time appoint any person who
is willing to act as a Director, either to fill a vacancy
or as an addition to the existing Board, but the total
number of Directors shall not exceed twenty-five.
Any Director so appointed by the Board shall retire
at the Annual General Meeting following his or her
appointment and shall be eligible for re-election but
would not be taken into account in determining the