HSBC 2008 Annual Report Download - page 300

HSBC HOLDINGS PLC
Report of the Directors: Governance (continued)
Board of Directors > Board committees / Internal control
298
service and has selected or influenced the choice of
KPMG. All services entered into with KPMG during
2008 were pre-approved by the Committee or were
entered into under pre-approval policies established
by the Committee. A quarterly update on non-audit
services provided by KPMG is presented to the
Committee by management.
The pre-approved services relate to regulatory
reviews, agreed-upon procedures reports, other types
of attestation reports, the provision of advice and
other non-audit services allowed under SEC
independence rules. They fall into the categories of
audit services, audit-related services, tax services
and other services.
An analysis of the remuneration paid in respect
of audit and non-audit services provided by KPMG
for each of the last three years is disclosed in Note 9
on the Financial Statements.
The Committee has recommended to the Board
that KPMG Audit Plc be reappointed auditor at the
forthcoming Annual General Meeting.
Remuneration Committee
The role of the Remuneration Committee and its
membership are set out in the Directors’
Remuneration Report on page 315.
Nomination Committee
The Nomination Committee is responsible for
leading the process for Board appointments and for
identifying and nominating, for approval by the
Board, candidates for appointment to the Board.
Before recommending an appointment to the Board,
the Committee evaluates the balance of skills,
knowledge and experience on the Board and, in the
light of this, identifies the role and capabilities
required for a particular appointment. Candidates are
considered on merit against these criteria. Care is
taken to ensure that appointees have enough time to
devote to HSBC. Prospective Directors are asked to
identify any significant other commitments and
confirm they have sufficient time to discharge what
is expected of them. In accordance with the Articles
of Association all Directors are subject to election
by shareholders at the Annual General Meeting
following their appointment by the Board and to
re-election at least every three years. The members
of the Nomination Committee throughout 2008 were
Sir Brian Williamson (Chairman), S M Robertson
and J W J Hughes-Hallett. R A Fairhead was
appointed a member of the Committee on 30 May
2008. Baroness Dunn and Sir Brian Moffat retired
as Directors of HSBC Holdings and ceased to be
members of the Committee on 30 May 2008. All
current members of the Committee are independent
non-executive Directors.
There were five meetings of the Nomination
Committee during 2008. The table on page 291 gives
details of Directors’ attendance at these meetings.
Following each meeting the Committee reports
to the Board on its activities.
The terms of reference of the Committee are
available at www.hsbc.com/boardcommittees.
The appointments of S A Catz, M K T Cheung,
J R Lomax, N R N Murthy and J L Thornton as non-
executive Directors and V H C Cheng, A A Flockhart
and S T Gulliver as executive Directors were made
on the advice and recommendation of the
Nomination Committee. An external consultancy
was used in connection with the appointments of
S A Catz, M K T Cheung, J R Lomax, N R N Murthy
and J L Thornton.
The terms and conditions of appointment of
non-executive Directors are available for inspection
at 8 Canada Square, London E14 5HQ and will be
made available for 15 minutes before the Annual
General Meeting and during the Meeting itself.
The Committee makes recommendations to the
Board concerning: plans for succession for both
executive and non-executive Directors; the
appointment of any Director to executive or other
office; suitable candidates for the role of senior
independent non-executive Director; the re-election
by shareholders of Directors retiring by rotation; the
renewal of the terms of office of non-executive
Directors; membership of Board Committees, in
consultation with the Group Chairman and the
chairman of such committees as appropriate; any
matters relating to the continuation in office of any
Director at any time; and appointments and re-
appointments to the boards of directors of major
subsidiary companies as appropriate.
The Committee regularly reviews the structure,
size and composition (including the skills,
knowledge and experience required) of the Board
and makes recommendations to the Board as
appropriate. It keeps under review the leadership
needs of HSBC, with a view to ensuring the
continued ability of HSBC to compete effectively in
the marketplace. The Board has satisfied itself that
the Nomination Committee has in place appropriate
plans for orderly succession to the Board and senior
management positions as well as procedures to
ensure an appropriate balance of skills and
experience within HSBC and on the Board.