HSBC 2007 Annual Report Download - page 299

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The Board has appointed S M Robertson as the
senior independent
non-executive Director. The
principal role of the senior independent non-
executive Director is to support the Group Chairman
in his role, to lead the non-executive Directors in the
oversight of the Group Chairman and to ensure there
is a clear division of responsibility between the
Group Chairman and Group Chief Executive. The
senior independent non-executive Director is also
available to shareholders for concerns which the
normal channels have failed to resolve or are
inappropriate.
The Board considers all of the non-executive
Directors to be independent in character and
judgement. Baroness Dunn, Sir Brian Moffat, Lord
Butler and W K L Fung have served on the Board
for more than nine years, however, and in that
respect only, do not meet the usual criteria for
independence set out in the UK Combined Code on
corporate governance. The Board has therefore
determined S A Catz, J D Coombe, J L Durán,
R A Fairhead, J W J Hughes-Hallett, W S H
Laidlaw, Sir Mark Moody-Stuart, G Morgan,
N R N Murthy, S W Newton, S M Robertson, and
Sir Brian Williamson to be independent. 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.
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 HSBC’s business, the
experience of previous service on a subsidiary
company Board can be a considerable benefit to
HSBC and does not detract from a Director’s
independence.
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, induction and ongoing
development
The Board regularly reviews reports on progress
against financial objectives, on business
developments and on investor and external relations
and receives reports from the Chairmen of Board
Committees and from the Group Chief Executive.
The Board receives regular reports and presentations
on strategy and developments in the customer groups
and principal geographical areas. Regular reports are
also provided to the Board, the Group Audit
Committee and the Group Management Board on
credit exposures and the loan portfolio, asset and
liability management, liquidity, litigation and
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.
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. Board offsite visits
are made each year to enable Directors to see at first
hand the operations of subsidiary companies in local
environments and to meet management, employees
and customers. In 2007 the Board visited New York
and Curitiba.
Full, formal and tailored induction programmes,
with particular emphasis on 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 receive information and familiarise
themselves with HSBC’s strategy, operations and
internal controls. Prior to their appointment, each
Director receives comprehensive guidance on the
duties and liabilities of a Director of HSBC
Holdings. Opportunities to update and develop skills
and knowledge, through externally run seminars and
through briefings by senior executives, are provided
to all Directors.
Performance evaluation
In November 2007, ICSA Corporate Services
Limited was commissioned to undertake an
evaluation of the effectiveness of the Board. This
was to investigate the performance of the Board as a
whole and, in that context, the main Board
committees and individual Directors. The evaluation
examined whether eight key areas met the Board’s
needs and expectations: Board responsibilities;
oversight; Board meetings; information received;
support for the Board; Board composition; working
together; and outcome and achievements. The report
on the evaluation has been reviewed by the Board
and has been used by the non-executive Directors,
led by the senior independent non-executive
Director, in their evaluation of the performance of