HSBC 2005 Annual Report Download - page 203

Download and view the complete annual report

Please find page 203 of the 2005 HSBC annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 424

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187
  • 188
  • 189
  • 190
  • 191
  • 192
  • 193
  • 194
  • 195
  • 196
  • 197
  • 198
  • 199
  • 200
  • 201
  • 202
  • 203
  • 204
  • 205
  • 206
  • 207
  • 208
  • 209
  • 210
  • 211
  • 212
  • 213
  • 214
  • 215
  • 216
  • 217
  • 218
  • 219
  • 220
  • 221
  • 222
  • 223
  • 224
  • 225
  • 226
  • 227
  • 228
  • 229
  • 230
  • 231
  • 232
  • 233
  • 234
  • 235
  • 236
  • 237
  • 238
  • 239
  • 240
  • 241
  • 242
  • 243
  • 244
  • 245
  • 246
  • 247
  • 248
  • 249
  • 250
  • 251
  • 252
  • 253
  • 254
  • 255
  • 256
  • 257
  • 258
  • 259
  • 260
  • 261
  • 262
  • 263
  • 264
  • 265
  • 266
  • 267
  • 268
  • 269
  • 270
  • 271
  • 272
  • 273
  • 274
  • 275
  • 276
  • 277
  • 278
  • 279
  • 280
  • 281
  • 282
  • 283
  • 284
  • 285
  • 286
  • 287
  • 288
  • 289
  • 290
  • 291
  • 292
  • 293
  • 294
  • 295
  • 296
  • 297
  • 298
  • 299
  • 300
  • 301
  • 302
  • 303
  • 304
  • 305
  • 306
  • 307
  • 308
  • 309
  • 310
  • 311
  • 312
  • 313
  • 314
  • 315
  • 316
  • 317
  • 318
  • 319
  • 320
  • 321
  • 322
  • 323
  • 324
  • 325
  • 326
  • 327
  • 328
  • 329
  • 330
  • 331
  • 332
  • 333
  • 334
  • 335
  • 336
  • 337
  • 338
  • 339
  • 340
  • 341
  • 342
  • 343
  • 344
  • 345
  • 346
  • 347
  • 348
  • 349
  • 350
  • 351
  • 352
  • 353
  • 354
  • 355
  • 356
  • 357
  • 358
  • 359
  • 360
  • 361
  • 362
  • 363
  • 364
  • 365
  • 366
  • 367
  • 368
  • 369
  • 370
  • 371
  • 372
  • 373
  • 374
  • 375
  • 376
  • 377
  • 378
  • 379
  • 380
  • 381
  • 382
  • 383
  • 384
  • 385
  • 386
  • 387
  • 388
  • 389
  • 390
  • 391
  • 392
  • 393
  • 394
  • 395
  • 396
  • 397
  • 398
  • 399
  • 400
  • 401
  • 402
  • 403
  • 404
  • 405
  • 406
  • 407
  • 408
  • 409
  • 410
  • 411
  • 412
  • 413
  • 414
  • 415
  • 416
  • 417
  • 418
  • 419
  • 420
  • 421
  • 422
  • 423
  • 424

201
took into consideration the need for the Group
Chairman to be able to work closely and effectively
with the Group Chief Executive, to have the
authority to run the Board and to have the personal
standing to represent HSBC externally at the highest
level. Job specifications for the Group Chairman and
the Group Chief Executive, setting out their
respective authorities and responsibilities, have been
agreed by the Board. The Nomination Committee
came to the unanimous conclusion that S K Green
was the outstanding candidate.
S K Green joined HSBC in 1982. He was Group
Treasurer from 1992 to 1998, and Executive
Director, Corporate, Investment Banking and
Markets from 1998 to 2003, when he was appointed
to his current position. He has worked in Hong
Kong, New York, the Middle East and London, and
has immense international experience and
knowledge of HSBC. The Committee concluded that
S K Green is superbly well qualified to serve as
Group Chairman.
S K Green’s successor as Group Chief
Executive will be M F Geoghegan, who has led
HSBC Bank, HSBC’s principal subsidiary in the
United Kingdom, since 2004. He too is highly
qualified for his new position and his appointment
also has the unanimous support of the Board. Mr
Geoghegan has 33 years’ experience with HSBC and
has worked in 10 countries in North and South
America, Asia, the Middle East and Europe.
Nowadays, success in financial services depends
in a large measure on the relative strengths of
competing management teams. Planning
management succession is key to this, has long been
established in the Group and the plan is regularly
reviewed by the non-executive Directors.
Furthermore, HSBC is a remarkable organisation
with a distinctive character and culture. The
business is managed through international teamwork
and HSBC believes this is best achieved by
management continuity and amongst colleagues who
have similar values. By way of example, the top 50
executives have a combined service approaching
1,000 years with HSBC, although 20 per cent of
these executives have joined the Group in the last six
years, thus ensuring there is a balance of new talent
to help run the business.
The Directors believe strongly that these
appointments are in the best interests of the
shareholders. The appointments have the unanimous
support of the Directors and have been made after
consulting with representatives of major institutional
investors and explaining the succession planning and
independent external search process.
Executive Directors are employees who carry
out executive functions in HSBC in addition to their
duties as Directors. Non-executive Directors are not
HSBC employees and do not participate in the daily
business management of HSBC. Non-executive
Directors bring an external perspective,
constructively challenge and help develop proposals
on strategy, scrutinise the performance of
management in meeting agreed goals and objectives
and monitor the reporting of performance. The non-
executive Directors have a wealth of experience
across a number of industries and business sectors,
including the leadership of large, complex
multinational enterprises. The roles of non-executive
Directors as members of Board committees are set
out below. It is estimated that non-executive
Directors spend 24 days per annum on HSBC
business after an induction phase, with Committee
members devoting significant additional time. The
names and brief biographical particulars of the
Directors are listed on pages 184 to 188.
The Board considers all of the non-executive
Directors to be independent in character and
judgement. Baroness Dunn and H Sohmen have
served on the Board for more than nine years,
however, and in that respect only, do not meet the
usual criteria for independence set out in the UK
Combined Code on corporate governance. The
Board has therefore determined Lord Butler,
R K F Ch’ien, J D Coombe, R A Fairhead,
W K L Fung, S Hintze, J W J Hughes-Hallett,
Sir John Kemp-Welch, Sir Brian Moffat, Sir Mark
Moody-Stuart, S M Robertson, S W Newton and Sir
Brian Williamson to be independent. In reaching its
determination of each non-executive Director’s
independence the Board has concluded that there are
no relationships or circumstances which are likely to
affect a Director’s judgement and any relationships
or circumstances which could appear to do so were
considered not to be material.
In accordance with the Rules Governing the
Listing of Securities on The Stock Exchange of
Hong Kong Limited, each non-executive Director
determined by the Board to be independent has
provided confirmation of his or her independence to
HSBC Holdings.
The Directors who served during the year were
W F Aldinger, Sir John Bond, Lord Butler,
R K F Ch’ien, J D Coombe, Baroness Dunn,
D G Eldon, R A Fairhead, D J Flint, W K L Fung,
M F Geoghegan, S K Green, S Hintze,
J W J Hughes-Hallett, A W Jebson, Sir John Kemp-
Welch, Sir Brian Moffat, Sir Mark Moody-Stuart,
S W Newton, H Sohmen, C S Taylor and Sir Brian
Williamson.