HSBC 2012 Annual Report Download - page 326

HSBC HOLDINGS PLC
Report of the Directors: Corporate Governance (continued)
Board committees > Group Risk Committee
324
Governance structure for the management of risk
Authority Membership Responsibilities include:
Board Executive and non-executive
Directors
• Approves risk appetite, strategy and performance targets
for the Group
• Approves appointment of senior risk officers
• Delegates authority for risk management
• Encourages a strong risk governance culture which shapes
the Group’s attitude to risk
GRC Independent non-executive Directors • Advises the Board on:
– risk appetite and alignment with strategy
– alignment of remuneration with risk appetite (through
advice to the Group Remuneration Committee)
– risks associated with proposed strategic acquisitions and
disposals
• Reviews the effectiveness of the Group’s systems of risk
management and internal controls (other than over
financial reporting)
• Oversees the maintenance and development of a
supportive culture in relation to the management of risk
Financial System Vulnerabilities
Committee
Executive Directors and co-opted
non-director members
• Oversees controls and procedures designed to identify
areas of exposure to financial crime or system abuse
• Oversees matters relating to anti-money laundering,
sanctions, terrorist financing and proliferation financing
• Reviews policies and procedures to ensure continuing
obligations to regulatory and law enforcement agencies are
met
Risk Management Meeting of the
GMB
Global Standards Steering Meeting
of the GMB
Group Chief Risk Officer
Group Chief Legal Officer
Group Chief Executive
Group Finance Director
All other Group Managing Directors
Group Chief Risk Officer
Group Chief Legal Officer
Group Chief Executive
Group Finance Director
All other Group Managing Directors
• Formulates high-level global risk policy
• Exercises delegated risk management authority
• Oversees implementation of risk appetite and controls
• Monitors all categories of risk and determines appropriate
mitigating action
• Promotes a supportive Group culture in relation to risk
management
• Develops and implements global standards reflecting best
practices which must be adopted and adhered to
throughout the Group
• Oversees initiatives to ensure our conduct matches our
values
Global Risk Management Board Group Chief Risk Officer
Chief Risk Officers of HSBC’s global
businesses and regions
Heads of risk areas within the Global
Risk Function
• Supports the Risk Management Meeting and the Group
Chief Risk Officer in providing strategic direction for the
Global Risk function, sets priorities and oversees their
execution
• Oversees consistent approach to accountability for, and
mitigation of, risk across the Global Risk function
Subsidiary board committees
responsible for risk-related matters
and global business risk
committees
Independent non-executive directors
and/or other independent members, as
appropriate
• Provides certification to the GRC or intermediate risk
committee on risk-related matters and internal controls
(other than over financial reporting) of relevant
subsidiaries or businesses, as appropriate
Risk reporting and monitoring
The GRC regularly monitors:
• the Group’s risk appetite and risk profile against
key performance/risk indicators, as set out in the
Group’s Risk Appetite Statement, on a Group-
wide, global business and regional basis;
• the top and emerging risks facing the Group;
and
• the risk profiles for separate categories of risk
within the Group’s business identified in the
Group’s Risk Appetite Statement, on a Group-
wide, global business and regional basis;
and reviews the mitigating actions proposed by
management.
Reports on these items are presented at each
meeting of the Committee. Regular reports from the
Risk Management Meeting, which is the executive
body responsible for overseeing risk, are also
presented.
In carrying out its responsibilities the
Committee is closely supported by the Group Chief
Risk Officer. The Committee also receives regular