HSBC 2007 Annual Report Download - page 303

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Sustainability Committee, certain co-opted
non-director members. The following are the
principal committees:
Group Management Board
The Group Management Board meets regularly and
operates as a general management committee under
the direct authority of the Board. The objective of
the Group Management Board is to maintain a
reporting and control structure whereby all of the
line operations of HSBC are accountable to
individual members of the Group Management
Board who report to the Group Chief Executive who
in turn reports to the Group Chairman. The Board
has set objectives and measures for the Group
Management Board. These will align senior
executives’ objectives and measures with the
strategy and operating plans throughout HSBC.
The members of the Group Management Board are
M F Geoghegan (Chairman), V H C Cheng and
D J Flint, who are executive Directors, and
A Almeida, C C R Bannister, A A Flockhart,
S T Gulliver, D H Hodgkinson, A Hungate,
D D J John, B P McDonagh, Y A Nasr and
B Robertson, all of whom are Group Managing
Directors.
The Group Management Board exercises the
powers, authorities and discretions of the Board in so
far as they concern the management and day-to-day
running of HSBC Holdings in accordance with such
policies and directions as the Board may from time
to time determine. Matters reserved for approval by
the Board are described on page 295.
Following each meeting the Group Chief
Executive reports to the Board on the Group
Management Board’s activities.
Group Audit Committee
The Group Audit Committee meets regularly with
HSBC’s senior financial, internal audit, credit, 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,
compliance and risk management. The members of
the Group Audit Committee throughout 2007 were,
R A Fairhead (appointed Chairman on 25 May
2007), J D Coombe and J W J Hughes-Hallett.
S W Newton was appointed a member of the
Committee on 25 May 2007. Sir Brian Moffat
ceased to be Chairman and a member of the
Committee on 25 May 2007. R K F Ch’ien retired as
a Director of HSBC Holdings and ceased to be a
member of the Committee on 25 May 2007. All
members of the Committee are independent non-
executive Directors.
The Board has determined that R A Fairhead,
J D Coombe, J W J Hughes-Hallett and S W Newton
are independent according to SEC criteria, and that
R A Fairhead, J D Coombe, and J W J Hughes-
Hallett may be regarded as audit committee financial
experts for the purposes of section 407 of the
Sarbanes-Oxley Act and as having recent and
relevant financial experience.
Appointments to the Committee are made for
periods of up to three years, extendable by no more
than two additional three-year periods, so long as
members continue to be independent.
Formal and tailored induction programmes are
held for newly-appointed Committee members and
appropriate training is provided on an ongoing and
timely basis.
There were seven meetings of the Group Audit
Committee during 2007. The table on page 296 gives
details of Directors’ attendance at these meetings.
Following each meeting the Committee reports to
the Board on its activities.
At each meeting, the Committee has the
opportunity to meet with the external auditor,
without management present, to facilitate the
discussion of any matter relating to its remit and any
issue arising from the audit. Similar arrangements
have been adopted for the Committee to meet with
the internal auditor.
The terms of reference of the Committee,
which are reviewed annually, are available at
www.hsbc.com/boardcommittees. To ensure
consistency of scope and approach by subsidiary
company audit committees, the Group Audit
Committee has established core terms of reference to
guide subsidiary company Boards when adopting
terms of reference for their audit committees.
Subsidiary company audit committees are required
to provide bi-annual certificates to the Committee
relating to the financial statements and internal
control procedures of those subsidiaries.
The Group Audit Committee is accountable to
the Board and assists it in meeting its responsibilities
for maintaining an effective system of internal
control and compliance and for meeting its external
financial reporting obligations. The Committee
undertakes an annual review of the effectiveness of
HSBC’s system of internal control, which is
described on page 304, and reviews the Company’s
financial statements before they are considered by
the Board.