Special Committees

Composition :

Chairman:

• Paul Dubrule - Appointed 1999 and 2002 (independent)

Members:

• Philippe Houzé - Appointed 1999 (independent)
• Stuart Gulliver - Appointed 2009

The Committee’s main tasks are as follows:

• making proposals to the Board of Directors regarding the appointment of Directors and members and Chairmen of the Board’s specialist committees, according to the desirable balance in the composition of the board but also to the specific skills and reputation of applicants;
• proposing a Chairman and a CEO to the Board, and proposing Deputy CEOs to the Board on the CEO’s recommendation, for succession planning purposes or in the event of a vacancy;
• examining all remuneration of Executive Directors;
• making proposals and recommendations to the Board concerning remuneration, pension and protection plans, additional pension contributions, benefits in kind and various cash entitlements of Executive Directors;
• making recommendations on Directors’ remuneration and the distribution of Directors’ fees;
• issuing opinions and recommendations on the executive remuneration policy and particularly on the remuneration structure;
• making preparations for the Board’s examination of corporate governance issues;
• lastly, in accordance with the new procedures stipulated by regulation 97-02 and instituted on 3 November 2009, carrying out an annual review of the remuneration policy and, more particularly, the share of variable compensation paid to market professionals and Executive Directors, to ensure that they are consistent with the HSBC Group’s policy and that they comply with French standards.
  Its recommendations on Executive Directors’ remuneration are presented after prior approval by the Remuneration Committee of HSBC Holdings plc.

Composition :

Chairman:

• Marcel Roulet  - Appointed 2003 and 2005
  (independent) as Chairman

Members:

• Peter Shawyer  - Appointed May 2005 (independent)
• Thierry Moulonguet - Appointed July 2009 (independent)

The Audit Committee’s main duties are defined in the Board’s internal rules. These duties underwent a far-reaching review in 2005 to ensure compliance with the Sarbanes-Oxley Act.
They are:

• to examine the integrity of the quarterly, halfyearly and annual financial statements submitted to the Board of Directors in order to ensure that the data and information provided give a true and fair picture of the Company’s operations and position;
• to discuss with the external auditors the financial statements, the scope of audits, restatements made, compliance with accounting principles, market rules and legal requirements, and the impact of any changes in accounting principles and practices;
• to review the Company’s financial and accounting policies and practices, and to review financial internal control systems;
• to make recommendations to the Board of Directors regarding the appointment of external auditors, their fees and any other issues concerning their duties;
• to assess the independence and objectivity of external Auditors, including supervision of the turnover of the signing partners and the effectiveness of the audit process;
• to apply the code of conduct concerning the provision of non-audit including supervision of turnover of the signing partners services by the external auditors;
•  to review the external Auditors’ management letter together with management’s response to it, and to monitor the implementation of recommendations made in the letter;
• to carry out a general review of the internal control system and to examine the internal control programme and resources;
• to examine management reports on the internal control system;
• to examine the system used by the Company and its subsidiaries to ensure compliance with directives issued by the supervisory authorities and with regulations applicable to them;
• to examine regular reports on the management of material risks and litigation related to the Company’s activity, and to ensure the effectiveness of the system for controlling these risks.

The Committee must meet the external Auditors and the internal audit officers alone at least once per year to ensure that no particular problems remain unresolved. To give itself sufficient time to review the accounts before they are reviewed by the Board, the Audit Committee generally meets four days before the Board. As required under the HSBC Group rules, once the Audit Committee has verified the accounting procedures used to prepare the financial statements, the Chairman of the Committee sends a letter of confirmation to the Chairman of the Audit Committee of HSBC Bank plc, HSBC France’s direct shareholder.

All the information concerning corporate governance are in the 2009 Annual Report and Accounts (pages 10 to 33)