HSBC 2008 Annual Report Download - page 297

295
with only some of the Code provisions or (in the
case of provisions whose requirements are of a
continuing nature) complied for only part of an
accounting period covered by the report, must
specify the Code provisions with which it has not
complied, and (where relevant) for what part of the
reporting period such non-compliance continued,
and give reasons for any non-compliance. As stated
above, HSBC Holdings complied throughout 2008
with the applicable code provisions of the Combined
Code. The Combined Code does not require HSBC
Holdings to disclose the full range of corporate
governance guidelines with which it complies.
Under NYSE standards, companies are required
to have a nominating/corporate governance
committee, composed entirely of independent
directors. In addition to identifying individuals
qualified to become Board members, this committee
must develop and recommend to the Board a set of
corporate governance principles. HSBC’s
Nomination Committee complies with the Combined
Code, which requires a majority of members to be
independent. All four members of the Committee are
independent non-executive Directors. The
Committee’s terms of reference do not require the
Committee to develop and recommend corporate
governance principles for HSBC Holdings. As stated
above, HSBC Holdings is subject to the corporate
governance principles of the Combined Code.
Pursuant to NYSE listing standards, non-
management directors must meet on a regular basis
without management present and independent
directors must meet separately at least once per year.
During 2008, HSBC Holdings’ non-executive
Directors met twice as a group with the Group
Chairman, but without other executive Directors
present, and met once as a group without the Group
Chairman or other executive Directors present.
HSBC Holdings’ practice, in this regard, complies
with the Combined Code.
In accordance with the requirements of the
Combined Code, HSBC Holdings discloses in its
annual report how the Board, its committees and the
Directors are evaluated (on page 293) and it provides
extensive information regarding Directors’
compensation in the Directors’ Remuneration Report
(on pages 315 to 328). The terms of reference of
HSBC Holdings’ Audit, Nomination and
Remuneration Committees are available at
www.hsbc.com/boardcommittees.
NYSE listing standards require US companies
to adopt a code of business conduct and ethics for
directors, officers and employees, and promptly
disclose any waivers of the code for directors or
executive officers. In addition to the Group Business
Principles and Values, which apply to the employees
of all HSBC companies, pursuant to the
requirements of the Sarbanes-Oxley Act the Board of
HSBC Holdings has adopted a Code of Ethics
applicable to the Group Chairman and the Group
Chief Executive, as the principal executive officers,
and to the Group Finance Director and Group Chief
Accounting Officer. HSBC Holdings’ Code of Ethics
is available on www.hsbc.com/codeofethics or from
the Group Company Secretary at 8 Canada Square,
London E14 5HQ. If the Board amends or waives
the provisions of the Code of Ethics, details of the
amendment or waiver will appear at the same
website address. During 2008, HSBC Holdings made
no amendments to its Code of Ethics and granted no
waivers from its provisions. The Group Business
Principles and Values are available on
www.hsbc.com/businessprinciplesandvalues.
Under NYSE listing rules applicable to US
companies, independent directors must comprise a
majority of the Board of directors. Currently, two
thirds of HSBC Holdings’ Directors are independent.
Under the Combined Code the HSBC Holdings
Board determines whether a Director is independent
in character and judgement and whether there are
relationships or circumstances which are likely to
affect, or could appear to affect, the Director’s
judgement. Under the NYSE rules a director cannot
qualify as independent unless the board affirmatively
determines that the director has no material
relationship with the listed company; in addition the
NYSE rules prescribe a list of circumstances in
which a director cannot be independent. The
Combined Code requires a company’s board to
assess director independence by affirmatively
concluding that the director is independent of
management and free from any business or other
relationship that could materially interfere with the
exercise of independent judgement.
Lastly, a chief executive officer of a US
company listed on the NYSE must annually certify
that he or she is not aware of any violation by the
company of NYSE corporate governance standards.
In accordance with NYSE listing rules applicable to
foreign private issuers, HSBC Holdings’ Group
Chief Executive is not required to provide the NYSE
with this annual compliance certification. However,
in accordance with rules applicable to both US
companies and foreign private issuers, the Group
Chief Executive is required promptly to notify the
NYSE in writing after any executive officer becomes
aware of any material non-compliance with the
NYSE corporate governance standards applicable to
HSBC Holdings.