HSBC 2015 Annual Report Download - page 311

HSBC HOLDINGS PLC
309
Strategic Report Financial Review Corporate Governance Financial Statements Shareholder Information
STRATEGIC PRIORITIES
Grow both business
and dividends
• Assessed the contribution of the Global Finance function in setting the framework to track progress against
the 10 Strategic Actions, and its on-going partnership and support to global businesses on initiatives
orientated to the reduction of Group RWAs and revenue generation programmes.
Global Standards
including risk and
compliance
• Noted the progress towards compliance with regulatory requirements and implementing Global Standards.
This was evidenced by the successful execution of the 2015 PRA stress test and the reporting on revised
‘Delegated Act’ basis of the liquidity coverage ratio, as well as by Finance’s tax transparency engagement
with global businesses’ clients.
Streamline processes
and procedures
• Recognised the support that the Global Finance function has provided to global businesses and functions
on key streamlining and cost saving initiatives, as well as the progress on its own Finance Transformation
Programme.
People • Noted the full implementation of the revised Finance Operating Model as well as the delivery of
accelerated development programmes to targeted Finance populations.
• The sustained work of the Global Finance function on improving gender diversity was also noted.
Marc Moses
Marc Moses achieved a performance outcome for the year
of 62% against his annual scorecard.
The chart shows the value and composition of Marc Moses’
remuneration based on the current policy in comparison
with the actual 2015 variable pay outcomes.
Annual assessment
Weighting
%
Target
$bn
Performance
$bn
Assessment
%
Outcome
%
Measure
Grow both business and dividends 20 Judgement – see commentary 85 17.0
Global Standards including risk and compliance 50 Judgement – see commentary 45 22.5
Streamline processes and procedures 20 Judgement – see commentary 75 15.0
Strategic priorities 90 54.5
People 10 Judgement – see commentary 75 7.5
Promoting HSBC Values Over-riding test Met
Total 100 62.0
STRATEGIC PRIORITIES
Grow both business
and dividends
• Recognised the use of risk appetite statements to enable a sustainable business, and the provision of
resources to support business growth (e.g., each global business has a formal governance process around
the management of RWAs).
Global Standards
including risk and
compliance
• Continued progress towards driving strategic priorities for Global Standards, progressing compliance with
regulatory requirements, and de-risking the organisation. Activity has continued at pace ensuring delivery
of the Regulatory Compliance Framework.
• We continue to prioritise our efforts on material inherent risk areas and implement targeted governance
and remediation efforts.
• However, the Committee exercised its discretion and reduced the assessment from 75% to 45%. This was
based on feedback received from the Monitor, matters arising from risk and compliance incidents, and the
number and extent of unsatisfactory internal audits covering AML and sanctions related issues.
Streamline processes
and procedures
• These objectives have progressed, supported by the management of business performance, delivery of key
transformation initiatives, and re-engineering of policies, procedures and systems.
• For example, credit risk management was significantly strengthened through the implementation of
multiple new policies on collections, allowances, stress testing, approval authorities and products.
• One significant structural change was the announcement of a new development in risk analytics at HSBC:
the creation of a centralised team called Global Risk Analytics.
People • The execution of the pay and performance plans, as well as the learning and development plans which
were part of the comprehensive people strategy for the Global Risk function were noted.
• Key initiatives include the first Aspiring CRO programme and further investment in the three lines of
defence.
50%
33%
51%
17%
22%
21%
33%
45%
28%
4,000
6,000
3,928
Policy target
Policy maximum
2015 actual
Fixed pay Annual incentive GPSP