HSBC 2015 Annual Report Download - page 195

HSBC HOLDINGS PLC
193
Strategic Report Financial Review Corporate Governance Financial Statements Shareholder Information
Appendix to Risk
Risk policies and practices
This appendix describes the significant policies and practices employed by HSBC in managing our credit risk, liquidity and funding, market risk,
operational risk (including compliance risk, legal risk and fiduciary risk), insurance risk, reputational risk, pension risk and sustainability risk.
Risk governance
Our strong risk governance reflects the importance placed by the Board and the Group Risk Committee (‘GRC’) on shaping
the Group’s risk strategy and managing risks effectively. It is supported by a clear policy framework of risk ownership, a risk
appetite process through which the types and levels of risk that we are prepared to accept in executing our strategy are
articulated and monitored, performance scorecards cascaded from the Group Management Board (‘GMB’) that align business
and risk objectives, and the accountability of all staff for identifying, assessing and managing risks within the scope of their
assigned responsibilities. This personal accountability, reinforced by the governance structure, mandatory learning and our
approach to remuneration, helps to foster a disciplined and constructive culture of risk management and control throughout
HSBC.
The executive and non-executive risk governance structures and their interactions are set out in the following table. Each
major operating subsidiary has established a board committee with non-executive responsibility for oversight of risk-related
matters and an executive meeting with responsibility for risk-related matters.
Governance structure for the management of risk
Authority Membership Responsibilities include:
Board Executive and non-executive
Directors
• Approving risk appetite, strategy and performance targets for the
Group
• Approving appointment of chief risk officers of subsidiary
companies
• Encouraging a strong risk governance culture which shapes the
Group’s attitude to risk
Group Risk
Committee
(‘GRC’)
Independent non-executive Directors • Advising 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
• Overseeing high-level risk related matters
• Reviewing the effectiveness of the Group’s systems of risk
management and internal controls (other than over financial
reporting)
• Overseeing the maintenance and development of a supportive
culture in relation to the management of risk
Financial System
Vulnerabilities
Committee
Non-executive Directors, including
the Chairman of the Group
Remuneration Committee, and
co-opted non-director members
• Overseeing controls and procedures designed to identify areas of
exposure to financial crime or system abuse
• Overseeing matters relating to anti-money laundering, sanctions,
terrorist financing and proliferation financing
• Reviewing policies and procedures to ensure continuing
obligations to regulatory and law enforcement agencies are met
Conduct & Values
Committee
Independent non-executive Directors • Ensuring that in the conduct of its business, HSBC treats all
stakeholders fairly
• Advising the Board on HSBC policies, procedures and standards to
ensure that the Group conducts business responsibly and
consistently adheres to the HSBC Values