9..Who is HSBC?

Headquartered in London, HSBC is one of the

largest banking and financial services
organisations in the world. HSBC's international
network comprises around 7,500 offices in over 80
countries and territories in Europe, the Asia-Pacific
region, the Americas, the Middle East and Africa.
With listings on the London, Hong Kong, New York,
Paris and Bermuda stock exchanges, shares in
HSBC Holdings plc are held by over 221,000
shareholders in 127 countries and territories. The
shares are traded on the New York Stock Exchange
in the form of American Depositary Receipts.
HSBC provides a comprehensive range of financial
services to around 89 million customers through
four global businesses: Retail Banking and Wealth
Management (formerly Personal Financial
Services); Commercial Banking; Global Banking
and Markets; and Global Private Banking
Our Vision:
As a member of HSBC family which has been serving its millions of
customers worldwide since 1865, to take our place among Turkeys most
powerful, most profitable, most admired leader banks.
Our Mission:
Having regard to ethical values; to meet its customers financial needs in
the fastest and most appropriate way, to continue innovative works in
order to achieve: human resource with superior qualities, technological
infrastructure and service packages.
Our Values:
1) To exceed customer expectations in service quality.
2) To be a pioneer in the implementation of technologies those create
distinction for its customers, employees and shareholders.
3) To keep its reliability at the utmost level with the contribution of its
strong capital structure and liquid assets.
4) To make a positive contribution to the community
5) To respect meritocracy during hiring processes, improving knowledge
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and skills of its employees, creating the mostly preferred work

environment.

HSBC Bank recognizes the importance of good corporate

governance, which is generally accepted as a key factor in attaining
fairness for all stakeholders and achieving organizational efficiency.
This Corporate Governance Policy, therefore, is established to
provide a direction and framework for managing and monitoring the
bank in accordance with the principles of good corporate
governance.

What is Corporate Governance?

Corporate Governance is the system by which companies are

directed and managed. It influences how the objectives of the
company are set and achieved, how risk is monitored and assessed,

and how performance is optimised.

Good corporate governance structures encourage companies to
create value (through entrepreneurism, innovation, development
and exploration) and provide accountability and control systems
commensurate with the risks involved.(ASX Corporate Governance
Council: Principles of Good Corporate Governance and Best Practice
Recommendations, March 2003)

Code of Corporate Governance

The Bank believes in adopting and adhering to the best recognised

corporate governance practices and continuously benchmarking itself
against each such practice. The Bank understands and respects its
fiduciary role and responsibility to shareholders and strives hard to meet
their expectations. The Bank believes that best board practices,
transparent disclosures and shareholder empowerment are necessary for
creating shareholder value.
The Bank has infused the philosophy of corporate governance into all its
activities. The philosophy on corporate governance is an important tool for
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shareholder protection and maximization of their long term values. The

cardinal principles such as independence, accountability, responsibility,
transparency, fair and timely disclosures, credibility, etc. serve as the
means for implementing the philosophy of corporate governance in letter
and spirit.

HSBC is committed to high standards of corporate

governance. HSBC Holdings has complied
throughout the year with the applicable code
provisions of the Combined Code on Corporate
Governance issued by the Financial Reporting
Council and the Code on Corporate Governance
Practices in Appendix 14 to the Rules Governing
the Listing of Securities on The Stock Exchange of
Hong Kong Limited.
The Board of HSBC Holdings has adopted a code
of conduct for transactions in HSBC Group
securities by Directors that complies with The
Model Code in the Listing Rules of the Financial
Services Authority and with The Model Code for
Securities Transactions by Directors of Listed
Issuers ('Hong Kong Model Code') set out in the
Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited, save that
The Stock Exchange of Hong Kong Limited has
granted certain waivers from strict compliance
with the Hong Kong Model Code, primarily to take
into account accepted practices in the UK,
particularly in respect of employee share plans.
Following a specific enquiry, each Director has
confirmed he or she has complied with the code of
conduct for transactions in HSBC Group securities
throughout the year.

Corporate Governance Essentials

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1.
2.
3.
4.
5.

High level of integrity

Timely and accurate disclosure of information
Establishing high standards of accountability
Management effectively monitored by the Board
High regard for shareholder value and equitable treatment of

shareholders
6. Key Business Values

This Code of Ethics / Conduct intends to ensure adherence to highest

business and ethical standards while conducting the business of the Bank
and compliance with the legal and regulatory requirements, including
compliance of Section 406 of the Sarbanes-Oxley Act of 2002 and the
rules and regulations framed thereunder by the Securities and Exchange
Commission of USA and other statutory and regulatory authorities in India
and USA. The Bank values the ethical business standards very highly and
intends adherence thereto in every segment of its business.
Applicability
This Code of Ethics/Conduct is applicable to the following persons.

The Board Members

Officials of the Bank one level below the Board

Ethical Conduct

The Board members / Officials shall engage in and promote honest and
ethical conduct of business, including the ethical handling of actual and /
or apparent conflicts of interest between personal and professional
relationships.
Conflict of Interest

The Board members / Officials shall avoid conflict of interest and disclose
to the Board any material transaction or relationship that reasonably could
be expected to give rise to such a conflict.
Confidentiality of Information
The Board members / Officials shall ensure and take all reasonable
measures to protect the confidentiality of non-public information about
the Bank, its business, customers and other materially significant
information obtained or created in connection with any activities with the
Bank and to prevent the unauthorised disclosure of such information
unless required by applicable laws or regulations or legal or regulatory
process.
Disclosure of Information
The Board members / Officials shall endeavor to produce full, fair,
accurate, timely and understandable disclosures in reports and documents
that the Bank files with or submits to the Securities and Exchange
Commission and other regulators and in other public communications
made by the Bank.
Compliance with Governmental Laws, Rules and Regulations
The Board members / Officials shall comply with all the applicable
governmental laws and the applicable rules and regulations.
Variation of the Code and Waivers
The Code shall be reviewed from time to time for updation thereof. Any
variation in the Code or any waivers from the provisions of the Code shall
be approved by the Board and shall be disclosed on the Bank's website.
Contract or Term of Employment
Nothing in this Code or other related communications by itself creates or
implies an employment contract or terms of employment.
Violation of the Code
The Board shall have the powers to take necessary action in case of any
violation of the code.
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HSBCs Key Business Values

1.
2.
3.
4.
5.
6.
7.

The highest personal standards of integrity at all levels

Commitment to truth and fair dealing
Hands-on management at all levels
A minimum of bureaucracy
Fast decisions and implementation
Putting the teams interests ahead of the individuals
The appropriate delegation of authority with

accountability
8. Contained in Instruction Manuals. Communicated
9. Integrity
10.
Minimal use of Committees to approve matters
11.
A Commitment to Complying With the Spirit and
Letter of All Laws and Regulations Wherever We Conduct
Our Business
12.
Reputation Is Essential
13.
Integrity, leads to reputation
14.
Years to build. Easy to lose. Reputation risk

HSBCs Business principles

1.
2.
3.
4.
5.

Outstanding customer service

Effective and efficient operations
Strong capital and liquidity
A prudent lending policy
Strict expense discipline

HSBC - some key facts

1. Listed on London, Hong Kong, New York, Paris and Bermuda
stock exchanges. Dual Primary listings in Hong Kong and
London. Committed to comply with whichever is the more
onerous provision
2. Subject to the Combined Code on Corporate Governance (UK)
and the Code on Corporate Governance Practice (HK)
3. Owned by more than 200,000 shareholders in some 100
4.
5.
6.
7.

countries and territories

US$128 billion of shareholders funds
Market capitalisation of over US$177.6 billion
Total assets of US$2,354 billion
More than 128 million customers
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8. Over 10.000 offices in 84 countries and territories

9. 510 regulators around the world

Regulation of HSBC
1. HSBC Group has some 490 different regulators globally
2. The UK Financial Services Authority (FSA) acts as the
Groups lead regulator but defers to local regulatory
authority in respect of offices outside UK
3. FSA acts as a single regulator for UK financial services
industry
4. HSBC Group has a strong control culture. The key control
functions being Finance, Credit and Risk, Compliance and
Audit

Structure of HSBC Holdings plc

1. HSBC Holdings plc is a public company incorporated under UK
company legislation
2. Operations are carried out by different operating subsidiaries,
including HSBC Bank plc, HSBC Bank USA, HSBC Latin America,
HSBC Mexico and The Hongkong and Shanghai Banking Corporation
Ownership Rights

Certain rights that a shareholder in a company enjoys :

To transfer the shares.
To receive the share certificates upon transfer within the stipulated
period prescribed in the Listing Agreement.
To receive notice of general meetings, annual report, the balance sheet
and profit and loss account and the auditors' report.
To appoint proxy to attend and vote at the general meetings. In case
the member is a body corporate, to appoint a representative to attend
and vote at the general meetings of the company on its behalf.
To attend and speak in person, at general meetings. Proxy cannot vote
on show of hands but can vote on a poll.
To vote at the general meeting on show of hands wherein every
shareholder has one vote. In case of vote on poll, the number of votes
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of a shareholder is proportionate to the number of equity shares held

by him.
As per Banking Regulation Act, 1949, the voting rights on a poll of a
shareholder of a banking company are capped at 10% of the total
voting rights of all the shareholders of the banking company.
To demand poll alongwith other shareholder(s) who collectively hold
5,000 shares or are not less than 1/10th of the total voting power in
respect of any resolution.
To requisition an extraordinary general meeting of any company by
shareholders who collectively hold not less then 1/10th of the total
paid-up capital of the company.
To move amendments to resolutions proposed at meetings .
To receive dividend and other corporate benefits like rights, bonus
shares etc. as and when declared / announced.
To inspect various registers of the company .
To inspect the minute books of general meetings and to receive copies
thereof after complying with the procedure prescribed in the
Companies Act, 1956.
To appoint or remove director(s) and auditor(s) and thus participate in
the management through them.
To proceed against the company by way of civil or criminal
proceedings.
To apply for the winding-up of the company.
To receive the residual proceeds upon winding up of a company.
The rights mentioned above are prescribed in the Companies Act, 1956
and Banking Regulation Act, 1949, whereever applicable, and should be
followed only after careful reading of the relevant sections. These rights
are not necessarily absolute.

Corporate governance Rating

The bank was amongst the first four companies, which subjected itself to
a Corporate Governance and Value Creation (GVC) rating by the rating
agency, The Credit Rating Information Services of India Limited (CRISIL).
The rating provides an independent assessment of an entity's current
performance and an expectation on its "balanced value creation and
corporate governance practices" in future. The bank has been assigned a
'CRISIL GVC Level 1' rating for the second consecutive year, which
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indicates that the bank's capability with respect to wealth creation for all
its stakeholders while adopting sound corporate governance practices is
the highest.
Reports to the Board
EXAMPLES OF REGULAR REPORTS TO THE BOARD
Reports to each Meeting
Chairman of the Group Audit Committee
Chairman of the Remuneration Committee
Chairman of the CSR Committee
Share Performance
Business Developments and Acquisitions
Chief Executives Business
Minutes of all Committee Meetings
Senior Appointments
Quarterly
Consolidated Results
Half-yearly
Substantial Litigation
Large Exposures
Peer Group Comparison
Auditors Letter and Management Response
Special Reports to the Board
IT Report

Credit & Risk Report

Large Exposure Policy
Investment Banking & Treasury Report
Internet Banking Report
5 year Strategic Plan
Annual Operating Plan
Capital Financing Plan
Annual and Interim Accounts
Financial Results Announcements
Notices of Shareholders Meetings
Major Policy Decisions
Customer Group Reports
Geographic Regional Reports

Corporate Social Responsibility

HSBC operates in 86 countries worldwide
Our Groups status as one of the worlds leaders in
the area of corporate social responsibility only
increases our sense of responsibility. The
experience and expertise we have gained
worldwide only makes us all the more effective in
this respect.
We approach every new social responsibility
project with excitement and passion and work
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consistently and with commitment to contribute to

our communities. Knowing that our people support
us every step of the way only makes us more
dedicated to contributing to our communities.
As a corporation that is aware of its corporate
social responsibility to create a better and more
sustainable world, we place great importance on
insuring that the projects we undertake are longterm and far-reaching. For this reason, we make it
a practice to involve our customers in our projects,
and their support makes our efforts even more
effective and meaningful.
All over the world, we at HSBC say, with the same
commitment and enthusiasm, We are Committed
to the Future.
We are volunteered for the future with society.
We are volunteered for the future with
education.
We are volunteered for the future with
environment.
We are volunteered for the future with art

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