HSBC 2015 Annual Report Download - page 264

Report of the Directors: Corporate Governance (continued)
Board committees
HSBC HOLDINGS PLC
262
Board committees
The Board has established a number of committees
consisting of Directors, Group Managing Directors and, in
the case of the Financial System Vulnerabilities Committee
and the Philanthropic & Community Investment Oversight
Committee, co-opted non-director members. The key
roles of the Board committees are described above. The
Chairman of each non-executive Board committee gives an
oral report at each meeting of the Board on the activities
of the committee since the previous Board meeting.
The Group Management Board (‘GMB’), chaired by the Group
CEO, is a management forum providing recommendations
and advice requested by the Group CEO, to assist him in his
management of the day-to-day operations of HSBC Holdings
plc and its subsidiaries pursuant to the authority delegated
to him by the Board of Directors.
The Group Chief Risk Officer, operating under the delegated
authority of the Group CEO, chairs regular Risk Management
Meetings of the GMB (‘RMM’). The RMMs provide strategic
direction and oversight of enterprise-wide management of
all risks and establish, maintain and periodically review the
policy and guidelines for the management of risk within the
Group.
Group Audit Committee
I am pleased to present the 2015 report of the Group Audit Committee
(‘GAC’).
The GAC has been very active during 2015, successfully completing the
transition of the external auditor to PwC, who formally took office
during the year. The GAC has instituted a process across the Group
Committees to ensure clarity of accountability and an enhanced
reporting protocol with the audit committees of the Group’s major
operating subsidiaries. This ensures clear lines of accountability at a
Group, regional, country and business line level. In addition to financial
reporting the GAC has taken accountability for recovery and resolution
planning.
During the year the GAC has closely monitored the transition to the
Committee of Sponsoring Organisations of the Treadway Commission
2013 (‘COSO’) internal control framework as detailed in this report. The
completion of this transition, which has occupied a considerable
amount of time, and the remediation of entity level controls has
supported the Board’s ability to assess the effectiveness of the system
of internal controls over financial reporting as detailed more fully on
page 277. The GAC also considered the enhanced governance
requirements associated with a new regulatory requirement for a
viability statement, as now set out on page 277 of this Report.
In 2016, the GAC’s work will include overseeing improvements to the
internal control framework and environment over financial reporting, the
controls around the Group’s resolution and recovery plans, as well as the
ring fencing of the retail banking operations in the UK. We will continue
working closely with the Group Risk Committee including where necessary,
joint meetings, to ensure continued alignment of our respective
accountabilities.
I should like to thank members of the Committee, Internal Audit and PwC,
as well as management, for their assistance and expertise during the year.
Jonathan Symonds Chairman
Group Audit Committee
22 February 2016
Financial System
Vulnerabilities Committee
Chairman’s
Committee
Conduct & Values
Committee
Nomination
Committee
Group Audit
Committee
Group Risk
Committee
Group Remuneration
Committee
Philanthropic &
Community Investment
Oversight Committee
Responsibility for identifying
and nominating candidates for
appointment by the Board.
Non-executive responsibility for
matters relating to financial
reporting and internal controls
over financial reporting.
Non-executive responsibility for
high level risk-related matters
and risk governance.
Non-executive responsibility for
setting the overarching principles,
parameters and governance
framework of the Group’s
remuneration policy and the
remuneration of senior executives.
Non-executive responsibility for
(i) controls and procedures to
identify areas where HSBC and the
financial system more broadly may
become exposed to financial crime
or system abuse, and (ii) HSBC’s
policies and procedures to ensure
the continuing obligations to
regulatory and law enforcement
agencies are met.
Acts on behalf of the Board
between scheduled Board
meetings to facilitate ad hoc
business requiring Board approval.
Non-executive responsibility for
HSBC’s policies, procedures and
standards to ensure that the
Group conducts business
responsibly and consistently
adheres to HSBC Values.
Non-executive responsibility for
HSBC’s philanthropic and
community investment activities in
support of the Group’s corporate
sustainability objectives.
HSBC Holdings plc
Board of Directors