HSBC 2001 Annual Report Download - page 141

139
Group Executive Committee
The Group Executive Committee meets regularly
and operates as a general management committee
under the direct authority of the Board. The members
of the Group Executive Committee are K R Whitson
(Chairman), Sir John Bond, C F W de Croisset, W R
P Dalton, D G Eldon, D J Flint, S K Green and A W
Jebson, all of whom are executive Directors, and R J
Arena, C-H Filippi, A P Hope, M B McPhee, A
Mehta and Y A Nasr, all of whom are Group General
Managers.
Group Audit Committee
The Group Audit Committee meets regularly with
HSBCs senior financial, 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 and
compliance. The members of the Group Audit
Committee are Sir Brian Moffat (Chairman), R K F
Ch'ien, Sir John Kemp-Welch, and C E Reichardt, all
of whom are independent non-executive Directors.
Remuneration Committee
The Remuneration Committee meets regularly to
consider human resource issues, particularly terms
and conditions of employment, remuneration,
retirement benefits, development of high potential
employees and key succession planning. The
members of the Remuneration Committee are Lord
Marshall (Chairman), W K L Fung, Sir John Kemp-
Welch and Sir Mark Moody-Stuart, all of whom are
independent non-executive Directors. Lord Marshall
succeeded Sir Peter Walters as Chairman of the
Remuneration Committee in May 2001. He will step
down from the Committee at the year end.
Nomination Committee
The Nomination Committee carries out the process
of nominating candidates to fill vacancies on the
Board of Directors. Nominations are considered by
the Board. All Directors are subject to election by
shareholders at the Annual General Meeting
following their appointment and to re-election at
least every three years. The members of the
Nomination Committee are Baroness Dunn
(Chairman), Sir John Bond, H Sohmen and Sir Brian
Moffat.
Corporate Governance
HSBC is committed to high standards of corporate
governance. HSBC Holdings has complied
throughout the year with the best practice provisions
of the Combined Code on corporate governance
appended to the Listing Rules of the Financial
Services Authority and with the provisions of
Appendix 14 to the Rules Governing the Listing of
Securities on The Stock Exchange of Hong Kong.
Internal control
The Directors are responsible for internal control in
HSBC and for reviewing its effectiveness.
Procedures have been designed for safeguarding
assets against unauthorised use or disposition; for
maintaining proper accounting records; and for the
reliability of financial information used within the
business or for publication. Such procedures are
designed to manage rather than eliminate the risk of
failure to achieve business objectives and can only
provide reasonable and not absolute assurance
against material errors, losses or fraud. The
procedures also enable HSBC Holdings to discharge
its obligations under the Handbook of Rules and
Guidance issued by the Financial Services Authority,
HSBCs lead regulator, which came into effect on 1
December 2001.
The key procedures that the Directors have
established are designed to provide effective internal
control within HSBC and accord with the Internal
Control Guidance for Directors on the Combined
Code issued by the Institute of Chartered
Accountants in England and Wales. Such procedures
have been in place throughout the year and up to 4
March 2002, the date of approval of the Annual
Report and Accounts. In the case of companies
acquired during the year, including Demirbank
T.A.S, which has been integrated into HSBC Bank
A.S., the internal controls in place have been
reviewed against HSBCs benchmarks since the
companies were acquired and they are being
integrated into HSBCs systems. HSBCs key
internal control procedures include the following:
• Authority to operate the various subsidiaries is
delegated to their respective chief executive
officers within limits set by the Board of
Directors of HSBC Holdings or by the Group
Executive Committee under powers delegated
by the Board. Sub-delegation of authority from