HSBC 2011 Annual Report Download - page 230

HSBC HOLDINGS PLC
Report of the Directors: Corporate Governance (continued)
Board of Directors > Directors / Corporate governance codes
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scheduled Board meetings. Directors have access to
internal training and development resources.
A personalised approach to training and
development of Directors is applied. Records of
development activities are maintained by the Group
Company Secretary for annual review by the Group
Chairman with the Director concerned.
Performance evaluation
In November 2011, Oliver Wyman was
commissioned to facilitate and report on the review
of effectiveness of the Board, with particular focus
on it meeting investor expectations and priorities,
and to review progress made in the year since the
previous review, which had focused on the Board’s
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 during Oliver Wyman’s review
included the Board’s performance in key priority
areas for investors including strategy, financial
performance, risk, regulation, compensation,
sustainability and corporate governance.
The Oliver Wyman report concluded that
the Board operates effectively with a number of
important strengths and that significant progress had
been made during 2011 to address recommendations
made by Oliver Wyman in last year’s report. The
report identified some areas where effectiveness
could be enhanced. Oliver Wyman has provided and
continues to provide consultancy services to the
Group.
The report is used by the Board in its
annual evaluation of its own performance and that of
its committees, and by the Group Chairman in his
review of the individual performance of Directors.
The Board will monitor implementation of actions
arising from its 2011 performance evaluation. All
actions arising from the Board’s 2010 performance
evaluation have been implemented.
It is the intention of the Board to continue to
undertake an evaluation of its performance and that
of its committees and individual Directors annually,
with external input to the process at least every third
year.
Formal evaluation of the individual performance
of each Director is undertaken annually by the Group
Chairman using the findings of the performance
evaluation process undertaken by the Board. During
this evaluation, the Group Chairman discusses the
contribution of the Director and the time spent by
them in performing their responsibilities. The Group
Chairman has confirmed that all of the non-
executive Directors continue to perform effectively
and to demonstrate commitment to their roles.
The non-executive Directors, led by the Deputy
Chairman and senior independent non-executive
Director, are responsible for the evaluation of the
performance of the Group Chairman.
Appointment, retirement and re-election of
Directors
The Board may at any time appoint any person who
is willing to act as a Director, either to fill a vacancy
or as an addition to the existing Board, but the total
number of Directors shall not exceed twenty-five.
Any Director so appointed by the Board shall retire
at the Annual General Meeting following his or her
appointment and shall be eligible for re-election but
would not be taken into account in determining the
number of Directors who are to retire by rotation at
such meeting in accordance with the Articles of
Association. The Board may appoint any Director
to hold any employment or executive office and
may revoke or terminate any such appointment.
Shareholders may, by ordinary resolution, appoint
a person a Director or remove any Director before
the expiration of his period of office. On the
recommendation of the Nomination Committee
and in compliance with provision B.7.1 of the UK
Corporate Governance Code, the Board has decided
that all of the Directors should be subject to annual
re-election by shareholders. Accordingly, all of the
Directors will retire at the forthcoming Annual
General Meeting and, with the exception of
G Morgan and Sir Brian Williamson who are to
retire, offer themselves for re-election. Each of the
executive Directors is employed on a rolling contract
which requires 12 months’ notice to be given by
either party. None of the non-executive Directors has
a service contract with HSBC.
Relations with shareholders
All Directors are encouraged to develop an
understanding of the views of major shareholders.
Non-executive Directors are invited to attend analyst
presentations and other meetings with institutional
investors and their representative bodies. Directors
also meet representatives of institutional
shareholders annually to discuss corporate
governance matters.
All executive Directors and certain other senior
executives hold regular meetings with institutional
investors. The Board receives a regular investor
relations activity report which provides feedback
from meetings with institutional shareholders and