HSBC 2015 Annual Report Download - page 196

Report of the Directors: Risk (continued)
Appendix to Risk – Policies and practices
HSBC HOLDINGS PLC
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Authority Membership Responsibilities include:
Risk Management
Meeting of the GMB
(‘RMM’)
Group Chief Risk Officer
Chief Legal Officer
Group Chief Executive
Group Finance Director
All other Group Managing Directors
• Formulating high-level global risk policy
• Supporting the Group Chief Risk Officer in exercising delegated
risk management authority
• Overseeing implementation of risk appetite and controls
• Monitoring all categories of risk and determining appropriate
mitigating action
• Promoting a supportive Group culture in relation to risk
management and conduct
• Implementing Global Standards throughout the Group
Global Risk Management
Board
Group Chief Risk Officer
Chief Risk Officers of HSBC’s global
businesses and regions
Heads of Global Risk sub-functions
• Supporting the RMM and the Group Chief Risk Officer in
providing strategic direction for the Global Risk function,
setting priorities and overseeing their execution
• Overseeing consistent approach to accountability for, and
mitigation of, risk across the Global Risk function
Global Business Risk
Management
Committees
Global Business Chief Risk Officer
Global Business Chief Executive
Global Business Chief Financial
Officer
Heads of Global Risk sub-functions,
as appropriate
• Forward looking assessment of changes in global business
activities or the markets in which it operates, analysing the
possible risk impact and taking appropriate action
• Overseeing the implementation of global business risk appetite
and controls
• Monitoring all categories of risk and determining appropriate
mitigating actions
• Promoting a strong risk culture
Regional Risk Management
Committees
Regional Chief Risk Officer
Regional Chief Executive Officer
Regional Chief Financial Officer
Regional Global Business Chief
Heads of Global Risk sub-functions,
as appropriate
• Formulating regional specific risk policy
• Overseeing the implementation of regional risk appetite and
controls
• Monitoring all categories of risk and determining appropriate
mitigating actions
• Promoting a strong risk culture
Subsidiary board committees
responsible for risk-related
matters and global business
risk committees
Independent non-executive directors
and/or HSBC employees with no
line or functional responsibility
for the activities of the relevant
subsidiary or global business, as
appropriate
• Providing reports 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
requested
The governance framework also defines the required structure for Risk sub-functions, stress testing and other key areas at
Group, global business, regional and country level.
Risk appetite
The Group’s Qualitative Risk Appetite Statement (‘RAS’) formally articulates our overarching risk appetite principles, serves as
a guide in embedding our risk appetite framework and supports strategic and operational decision-making across the Group.
• Strong capital position: we are to have a strong capital position defined by robust regulatory and internal capital ratios. The
progression of dividends should be consistent with the growth of the Group’s profitability and is predicated on the ability to
meet all capital requirements in a timely manner. Both the Group and its individual legal entities must self-capitalise with
capital generation, net of dividends, exceeding the capital needed to support organic growth in the entity’s risk-weighted
assets;
• Liquidity and funding management: operating entities are required to manage liquidity risk on a stand-alone basis with no
implicit reliance on the Group or central banks and be able to withstand a Group-defined remote liquidity stress scenario.
Customer assets and other illiquid assets must be funded with reliable and stable sources of funding;
• Risk return relationship: we aim to generate returns in line with the risk taken and in alignment with strategic plans,
strategic business outlooks and risk management policies;