HSBC 2010 Annual Report Download - page 194

HSBC HOLDINGS PLC
Report of the Directors: Governance (continued)
Board of Directors > The Board
192
is a clear division of responsibility between the
Group Chairman and Group Chief Executive.
The Board considers all of the non-executive
Directors to be independent in character and
judgement. The Board has determined S A Catz,
L M L Cha, M K T Cheung, J D Coombe,
R A Fairhead, J W J Hughes-Hallett,
W S H Laidlaw, J R Lomax, G Morgan,
N R N Murthy, Sir Simon Robertson, J L Thornton
and Sir Brian Williamson to be independent. 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 our business, the experience of previous
service on a subsidiary company board can be a
considerable benefit and does not detract from
a Director’s independence. 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.
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, business developments
and 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, global
businesses and principal geographical areas. Regular
reports are also provided to the Board, the Group
Audit Committee, the Group Risk Committee and
the Risk Management Meeting of the GMB on credit
exposures and the loan portfolio, asset, liability and
risk management, liquidity, litigation and finance,
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 business operations in local environments
and to meet management, employees and customers.
Full, formal and tailored induction programmes,
with particular emphasis on the systems of risk
management and internal controls, are arranged by
the Group Company Secretary 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 our strategy, risk
appetite, operations and internal controls. As part of
the induction process the Group Company Secretary
will coordinate the production of a development
programme based on the individual Director’s needs.
Directors receive comprehensive guidance on the
duties and liabilities of a Director of HSBC Holdings
before appointment and opportunities to update and
develop their skills and knowledge, through
externally run seminars and briefings by senior
executives, throughout their directorship.
Induction programmes are also arranged for
newly appointed members of committees and
appropriate training is provided on an ongoing basis.
A personalised approach to training and
development of Directors is applied. Development
plans and records of development activities are
maintained by the Group Company Secretary for
annual review by the Group Chairman with the
Director concerned. The Group Company Secretary
coordinates the delivery of any training required.
Focused in-house development programmes to
enhance business awareness are arranged in
conjunction with scheduled Board Meetings.
Directors have access online to internal training and
development resources.
Non-executive Directors have an open invitation
to attend meetings of the GMB to further enhance
their understanding and awareness of our businesses
and the senior leadership team.
Performance evaluation
In November 2010, Oliver Wyman was
commissioned to review and report on the
effectiveness of the Board and its principal
committees with a particular focus on risk
management and governance responsibilities. Oliver
Wyman’s report was prepared following interviews
with Directors and senior members of management
and a review of relevant documents. Factors assessed