HSBC 2005 Annual Report Download - page 207

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under pre-approval policies established by the Group
Audit Committee.
The pre-approved services relate to the
provision of objective advice, attestation type
services or opinions on areas such as controls and
are used as an input into management decision-
making. They fall into the following four categories:
Audit services
In addition to the statutory audit appointments,
which are approved by the Group Audit Committee,
this category includes services that are normally
provided by the independent auditor in connection
with statutory and regulatory filings or engagements,
such as reviews of interim financial information,
letters to securities underwriters in connection with
debt or equity offerings, the inclusion of auditors’
reports in filings with the SEC and certain reports on
internal control over financial reporting.
Audit-related services
These services are those provided by the principal
auditor that are reasonably related to the
performance of the audit or review of the Group’s
financial statements. Examples of such services are
due diligence services provided in connection with
potential acquisitions, audits or reviews of employee
benefit plans, ad hoc attestation or agreed-upon
procedures reports (including reports requested by
regulators), and accounting and regulatory advice on
actual or contemplated transactions.
Tax services
This category includes both tax advice and
compliance services. Examples of such services are
advice on national and local income taxation matters,
(including assistance in data gathering for
preparation, review and submission as agent of tax
filings), advice on tax consequences of management-
proposed transactions and assistance in responding
to tax examinations by governmental authorities.
The pre-approved tax services explicitly exclude
proposals for tax structures unconnected with a
contemplated transaction and whose main motive is
to reduce taxation.
Other services
This category includes various other assurance and
advisory services, such as training, or advice or
assurance provided on specific elements of financial
data and models, IT security and advice, and
providing due diligence on financial reviews of
HSBC customers and private equity investments.
All services provided by KPMG relating to the
implementation of section 404 of the Sarbanes-
Oxley Act were specifically pre-approved by the
Group Audit Committee.
An analysis of the remuneration paid in respect
of audit and non-audit services provided by KPMG
for each of the last two years is disclosed in Note 8
on the Financial Statements.
The Committee has recommended to the Board
that KPMG Audit Plc be reappointed as Auditor at
the forthcoming Annual General Meeting.
Remuneration Committee
The role of the Remuneration Committee and its
membership are set out in the Directors’
Remuneration Report on page 215.
Nomination Committee
The Nomination Committee is responsible for
leading the process for Board appointments and for
identifying and nominating, for approval by the
Board, candidates for appointment to the Board.
Before recommending an appointment to the Board,
the Committee evaluates the balance of skills,
knowledge and experience on the Board and, in the
light of this, identifies the role and capabilities
required for a particular appointment. Candidates are
considered on merit against these criteria. Care is
taken to ensure that appointees have enough time to
devote to HSBC. All Directors are subject to election
by shareholders at the Annual General Meeting
following their appointment and to re-election at
least every three years. The members of the
Nomination Committee throughout 2005 were
Sir Brian Moffat (Chairman), Lord Butler, Baroness
Dunn and Sir Brian Williamson.
There were three Nomination Committee
meetings during 2005, each of which was attended
by all members.
Following each meeting the Committee reports
to the Board on its activities.
The terms of reference of the Committee are
available at www.hsbc.com/committeen.
The appointments of J D Coombe,
J W J Hughes-Hallett and S M Robertson as non-
executive Directors were made on the advice and
recommendation of the Nomination Committee. An
external consultancy was used in connection with
these appointments.
As set out on page 205, the Committee
conducted the selection process which recommended
to the Board that S K Green succeed Sir John Bond