HSBC 2009 Annual Report Download - page 315

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independent non-executive Directors. The Board
appointed S K Green, Group Chairman to succeed
Sir Brian Williamson as chairman of the Nomination
Committee on 26 February 2010. Sir Brian remains a
member of the Committee.
There were three meetings of the Nomination
Committee during 2009. The table on page 304 gives
details of Directors’ attendance at these meetings.
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/boardcommittees.
The appointment of M K T Cheung as a non-
executive Director was made on the advice and
recommendation of the Nomination Committee. An
external consultancy was used in connection with the
appointment.
During 2009 the Committee considered the
recommendations of the Walker Review that
fall within its remit. The Committee made
recommendations to the Board regarding time
commitment and the re-election of Directors.
The terms and conditions of appointment of
non-executive Directors are available for inspection
at 8 Canada Square, London E14 5HQ and will be
made available for 15 minutes before the Annual
General Meeting and during the Meeting itself.
The Committee makes recommendations to the
Board concerning: plans for succession for both
executive and non-executive Directors; the
appointment of any Director to executive or other
office; suitable candidates for the role of senior
independent non-executive Director; the re-election
by shareholders of Directors retiring by rotation; the
renewal of the terms of office of non-executive
Directors; membership of Board Committees, in
consultation with the Group Chairman and the
chairman of such committees as appropriate; any
matters relating to the continuation in office of any
Director at any time; and appointments and re-
appointments to the boards of directors of major
subsidiary companies as appropriate.
The Committee regularly reviews the structure,
size and composition (including the skills,
knowledge and experience required) of the Board
and makes recommendations to the Board as
appropriate. It keeps under review the leadership
needs of HSBC, with a view to ensuring the
continued ability of HSBC to compete effectively in
the marketplace. The Board has satisfied itself that
appropriate plans are in place for orderly succession
to the Board and senior management positions as
well as procedures to ensure an appropriate balance
of skills and experience within HSBC and on the
Board.
Corporate Sustainability Committee
The role of the Corporate Sustainability Committee
and its membership are set out on page 328.
Internal control
The Directors are responsible for internal control in
HSBC and for reviewing its effectiveness.
Procedures have been designed for safeguarding
assets against unauthorised use or disposition; for
maintaining proper accounting records; and for the
reliability and usefulness of financial information
used within the business or for publication. Such
procedures are designed to manage rather than
eliminate the risk of failure to achieve business
objectives and can only provide reasonable and not
absolute assurance against material misstatement,
errors, losses or fraud. The procedures also enable
HSBC Holdings to discharge its obligations under
the Handbook of Rules and Guidance issued by the
FSA, HSBC’s lead regulator.
The key procedures that the Directors have
established are designed to provide effective internal
control within HSBC and accord with the Internal
Control: Revised Guidance for Directors on the
Combined Code issued by the Financial Reporting
Council. Such procedures for the ongoing
identification, evaluation and management of the
significant risks faced by HSBC have been in place
throughout the year and up to 1 March 2010, the date
of approval of the Annual Report and Accounts
2009. In the case of companies acquired during the
year, the internal controls in place are being
reviewed against HSBC’s benchmarks and
integrated into HSBC’s processes.
HSBC’s key internal control procedures include
the following:
• Authority to operate the various subsidiaries and
responsibilities for financial performance
against plans and for capital expenditure are
delegated to their respective chief executive
officers within limits set by the Board of
Directors of HSBC Holdings. Delegation of
authority from the Board to individuals requires
those individuals to maintain a clear and
appropriate apportionment of significant
responsibilities and to oversee the establishment
and maintenance of systems of control
appropriate to the business. The appointment of
executives to the most senior positions within