Role, Members and Effectiveness of the Governance Committee

Sir John Peace, Chairman of the Governance Committee (photo)
Rudy Markham, Member of the Governance Committee (photo)
Peter Sands, Member of the Governance Committee (photo)
Governance Committee Members


meetings: 3

J W Peace (Chairman) (1)


R H P Markham (2)


P A Sands (3)


Other attendees at Committee meetings include:
the Group Company Secretary. The Regional Governance Chief Executive Officers are invited to attend on an occasional basis.

The Committee’s role

The Committee is an enabling body to provide a dedicated forum for the Group Chairman, Group Chief Executive and Senior Independent Director (SID) to consider key corporate governance issues. In addition to providing oversight of all material corporate governance issues affecting the Group and making recommendations to the Board, the Committee also monitors developments and emerging best practice in corporate governance across our markets. Our remit also covers oversight of the process by which the Board, each Board Committee and individual directors assess their effectiveness and reviews the geographical governance that is applied across the Group.

Emerging trends and their impact on our approach to subsidiary governance

During the year, the Committee carried out a review into the Group’s geographical governance framework and the philosophy underpinning the Group’s approach to subsidiary governance. As part of this review, the Committee received an overview of emerging trends and developments impacting the Group’s approach to subsidiary governance, and a comprehensive outline of the linkages that are in place between the Board and its banking subsidiary boards and committees. This review also covered proposed enhancements to our subsidiary governance philosophy, to ensure that the Group remains abreast of the changing demands of the global business environment and local regulatory developments in corporate governance codes and standards.

There are multiple linkages in place that enable the Group to have an integrated approach to the governance of our banking subsidiaries. These linkages work through both formal and informal channels of communication. There are two-way information flows between the Board and its banking subsidiaries. For example, the annual calls hosted by the Group Chairman, Group Chief Executive Officer and the Audit Committee Chairman are particularly important channels of communication, and provide our subsidiary independent non-executive directors with an opportunity to interact and receive an overview of the Group’s key priorities and issues. Feedback indicates that these calls bring real value to the subsidiary independent non-executive directors and contribute to ensuring continued alignment across the banking subsidiaries, between the Group’s overall strategic directions and country priorities. In addition, when directors travel across our network they often meet with directors of our banking subsidiary boards.

In 2012, the chairmen of 11 of our banking subsidiaries across Africa met in China, which resulted in them gaining a much better appreciation of the Group’s ability to capture and support trade flows between China and Africa.

In addition during 2012, our banking subsidiary boards from mainland China, Hong Kong and Taiwan met to discuss Greater China strategic opportunities. The Group Chairman participated in this event. These are just some examples to illustrate the focus that we place on ensuring appropriate and effective linkages between the Board and the boards of the Group’s banking subsidiaries.

Board, committee, individual directors and chairman effectiveness

In 2012, the Committee maintained oversight of progress to address actions arising from the 2011 Board effectiveness review. It also conducted a thorough review of the feedback arising from the 2012 Board effectiveness review, ahead of the Board’s discussion.

As part of its discussions, the Committee received an update from the Group Chairman on his one-on-one meetings with each director to discuss their individual performance. The SID also updated the Committee on the process he undertook to review the effectiveness of the Group Chairman. Further details on this can be found under the report by the Nomination Committee.

The Committee has also considered the approach to be followed for the next Board effectiveness review.

Corporate governance trends and emerging best practice

Throughout the year, the Committee received regular updates on key developments in the corporate governance environment and trends faced across the Group’s footprint. For example, the Committee has considered the growing trend for more independent directors on banking subsidiary boards, more local nationals on boards and the trend towards more subsidiary board committees.

Emerging best practice

During 2012, there continued to be a steady stream of corporate governance publications and consultations. The Committee maintained oversight of the approach that has been taken in responding to these.

Oversight of the lessons learned arising from the settlements with the US authorities1

The Committee is fulfilling a significant role in overseeing the approach taken in relation to lessons learned from the settlements with the US authorities. Governance oversight for actions has been divided between the Board as a whole (for those actions with strategic implications) and the various board committees. For example, the Audit Committee will, in the ordinary course of its activities, retain oversight of the remediation programme agreed as part of the settlements with the US authorities. The Brand and Values Committee will continue to oversee any impact on the Group’s reputation. The remuneration-related matters arising from the settlements with the US authorities were discussed by the Remuneration Committee.

2012 Committee effectiveness review

The Committee discussed its effectiveness at the end of 2012 and agreed that over the last three years it had provided a useful forum to focus on and discuss key corporate governance issues of significance to the Group.

1 The US authorities comprise The New York Department of Financial Services (DFS), the Office of Foreign Assets Control (OFAC), the New York County District Attorney’s Office (DANY), the United States Department of Justice (DOJ) and the Federal Reserve (NYFED)

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