HSBC 2010 Annual Report Download - page 196

HSBC HOLDINGS PLC
Report of the Directors: Governance (continued)
Board of Directors > The Board // Board committees > Group Management Board / Group Audit Committee
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may be contacted through the Group Company
Secretary at 8 Canada Square, London E14 5HQ.
Conflicts of interest, indemnification of
Directors, relevant audit information and
contracts of significance
The Board has authority to approve Directors’
conflicts and potential conflicts of interest and
has adopted a policy and procedures for the
determination of terms of authorisation for such
situations. The Board’s powers to authorise conflicts
are operating effectively and the procedures are
being followed. A review of situational conflicts
which have been authorised from time to time and
the terms of those authorisations is undertaken by the
Board annually.
Our Articles of Association provide that
Directors are entitled to be indemnified out of the
assets of HSBC Holdings against claims from third
parties in respect of certain liabilities arising in
connection with the performance of their functions
pursuant to the provisions of the Companies Act
2006. Such indemnity provisions have been in place
during the financial year but have not been utilised
by the Directors.
Each person who is a Director at the date of
approval of this report confirms that so far as he or
she is aware, there is no relevant audit information of
which the auditor is unaware and the Director has
taken all the steps that he or she ought to have taken
as a Director in order to make himself or herself
aware of any relevant audit information and to
establish that the Company’s auditor is aware of that
information. This confirmation is given pursuant to
section 418 of the Companies Act 2006 and should
be interpreted in accordance therewith and subject to
the provisions thereof.
None of the Directors had, during the year or at
the end of the year, a material interest, directly or
indirectly, in any contract of significance with any
HSBC company.
Corporate governance codes
We are committed to high standards of corporate
governance. We have complied throughout the year
with the applicable code provisions of the Combined
Code on Corporate Governance issued by the
Financial Reporting Council, save for code provision
A.2.2 as D J Flint, who had previously served as
Chief Financial Officer, Executive Director, Risk
and Regulation, did not meet the independence
criteria of the Combined Code on Corporate
Governance when he was appointed Group
Chairman on 3 December 2010. The Board’s
explanation of its decision to appoint D J Flint is set
out on page 191. We have complied throughout the
year with all applicable code provisions of the Code
on Corporate Governance Practices in Appendix 14
to the Rules Governing the Listing of Securities on
The Stock Exchange of Hong Kong Limited. The
Combined Code on Corporate Governance is
available at www.frc.org.uk and the Code on
Corporate Governance Practices is available at
www.hkex.com.hk.
The Board has adopted a code of conduct for
transactions in HSBC Group securities by Directors.
The code of conduct complies with The Model Code
in the Listing Rules of the FSA and with The Model
Code for Securities Transactions by Directors of
Listed Issuers (‘Hong Kong Model Code’) set out in
the Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited, save that
The Stock Exchange of Hong Kong Limited has
granted certain waivers from strict compliance with
the Hong Kong Model Code. The waivers granted
by The Stock Exchange of Hong Kong Limited
primarily take into account accepted practices in the
UK, particularly in respect of employee share plans.
Following a specific enquiry, each Director has
confirmed he or she has complied with the code of
conduct for transactions in HSBC Group securities
throughout the year.
Board committees
The Board has appointed a number of committees
consisting of certain Directors, Group Managing
Directors and, in the case of the Corporate
Sustainability Committee, certain co-opted non-
director members. Information in relation to the
principal committees is set out below:
Group Management Board
The GMB, an executive management committee,
meets frequently and operates as a general
management committee under the direct authority
of the Board. The objective of the GMB is to
maintain a reporting and control structure whereby
all of our line operations are accountable to
individual members of the GMB who report to the
Group Chief Executive who in turn reports to the
Group Chairman. The Board has set objectives and
measures for the GMB. These align senior
executives’ objectives and measures with the
strategy and operating plans throughout HSBC.
The members of the GMB are S T Gulliver
(Chairman), A A Flockhart and I J Mackay, who are
executive Directors, and A Almeida, E Alonso,
S Assaf, N S K Booker, A M Keir, M M Moses,