HSBC 2012 Annual Report Download - page 325

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Overview Operating & Financial Review Corporate Governance Financial Statements Shareholder Information
auditor provided written confirmation of its
independence under industry standards.
The policies for the pre-approval of specific
services that may be provided by the principal
auditor are kept under review by the Committee and
amended as necessary to meet the dual objectives of
ensuring that we benefit in a cost effective manner
from the cumulative knowledge and experience of
our auditor, while also ensuring that our external
auditor maintains the necessary degree of
independence and objectivity. These pre-approval
policies apply to all services where any HSBC
company pays for the service, or is a beneficiary
or addressee of the service, and has selected or
influenced the choice of KPMG. All services
provided by KPMG during 2012 were pre-approved
by the Committee or were entered into under pre-
approval policies established by the Committee.
The pre-approved services relate to regulatory
reviews, agreed-upon procedures reports, other types
of attestation reports, the provision of advice and
other non-audit services allowed under SEC
independence rules. The services fall into the
categories of audit services, audit-related services,
tax services and other services.
An analysis of the remuneration paid in respect
of audit and non-audit services provided by KPMG
for each of the past three years is disclosed in
Note 8 on the Financial Statements.
Group Risk Committee
The GRC is responsible for advising the Board on
high-level risk-related matters and risk governance
and for non-executive oversight of risk management
and internal controls (other than over financial
reporting).
Meetings
attended
Meetings
eligible
to attend
Members1
R A Fairhead2 (Chairman) ...... 6 7
J D Coombe ............................ 7 7
J Faber3 .................................... 5 5
J W J Hughes-Hallett4 ............. 4 5
J P Lipsky3 .............................. 5 5
J R Lomax ............................... 7 7
Meetings held in 2012 ........... 7
1 All members are independent non-executive Directors.
2 Took a temporary leave of absence due to illness.
3 Appointed a member of the Committee on 1 March 2012.
4 Retired as a member of the Committee on 31 July 2012.
John Trueman, a non-executive director of
HSBC Bank plc and Chairman of its risk and audit
committees has continued to attend meetings of
the GRC by invitation during 2012. Robert
Herdman, a non-executive director of HSBC North
America Holdings Inc. and HSBC Bank USA, has
been invited by the GRC to attend its meetings from
the beginning of 2013. Their experience of risk-
related matters in the financial services industry
is valued by the Committee.
Governance
All of HSBC’s activities involve, to varying degrees,
the measurement, evaluation, acceptance and
management of risk or combinations of risks. The
Board, advised by the Committee, requires and
encourages a strong risk governance culture which
shapes the Group’s attitude to risk. The Board
and the Committee oversee the maintenance
and development of a strong risk management
framework by continually monitoring the risk
environment, top and emerging risks facing the
Group and mitigating actions planned and taken.
The Committee monitors the effectiveness of
the Group’s risk management and internal controls
systems other than over financial reporting, which
are monitored by the GAC.
The governance structure for the management
of risk is 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
committee with responsibility for risk-related
matters.