HSBC Holdings, the parent company of HSBC Group, has created a new committee of the board of directors called the Financial System Vulnerabilities Committee. Separately, HSBC appointed a new non-executive director, who will be a member of the new committee.

Douglas Flint, Group Chairman of HSBC, explained the rationale for the new committee: “We have established this committee to provide governance, oversight and policy advice and to support the work which Stuart Gulliver, the Group Chief Executive, is leading to simplify business activities and enhance risk management and control through enforcing and adopting the highest behavioural and compliance standards across HSBC.”

“The new committee, which will benefit from the experience of the expert advisers, will provide invaluable guidance and advice as we strengthen our capabilities and enforce the highest standards, in particular in relation to combating financial crime," added Stuart Gulliver. 

The committee will provide governance, oversight and policy guidance over HSBC's framework of controls and procedures designed to identify areas where HSBC and the financial system more broadly may become exposed to financial crime or system abuse. The committee will oversee and report to the board on management's implementation of the actions necessary to build assurance in these areas.

The scope of the committee's remit will encompass governance, oversight and policy guidance with respect to the following:

Anti money-laundering systems and controls;

The application of Group Standards regarding tax transparency, anti-avoidance and compliance;

Prevention of terrorist financing;

Prevention of association with illegal drugs activities;

Application and enforcement of financial sanctions;

Intelligence in relation to all of the above regarding emerging threats; and

Effective relationships with governments and law enforcement agencies in relation to the above.

The Financial System Vulnerabilities Committee will also assist the board in meeting its continuing obligations to regulatory and law enforcement agencies in the areas noted above and will seek to provide the board with a forward-looking perspective on financial crime risk.

The committee will comprise at least two non-executive directors and be supported by five subject matter experts as advisers, as set out below. 

New Director Appointed

James Comey, a former U.S. Deputy Attorney General, has been appointed as a director of HSBC Holdings, effective March 4. He will be an independent non-executive director and a member of the Financial System Vulnerabilities Committee.

Comey is a senior research scholar and Hertog Fellow on National Security Law at Columbia University Law School in New York. Formerly, he was general counsel of investment company Bridgewater Associates. From 2005 until 2010, he served as senior vice president and general counsel at Lockheed Martin.

From 2003 to 2005, he served as U.S. Deputy Attorney General and was responsible for supervising the operations of the Department of Justice and chaired the president's Corporate Fraud Task Force.

Earlier in his career, Comey served as a U.S. attorney for the Southern District of New York and supervised the prosecution of executives on fraud and securities related charges and created a specialized unit to prosecute international drug cartels.

Comey's appointment to the Financial System Vulnerabilities Committee will be for an initial three-year term which, subject to re-election by shareholders, will expire at the conclusion of the 2016 annual meeting.

In Other News

HSBC has appointed Manveen Pam Kaur as group head of internal audit and a group managing director, effective April 1. She will succeed Paul Lawrence, who has decided to retire from HSBC after 31 years of service.

Kaur will join the group management board and report to Group Chief Executive Stuart Gulliver and the risk and audit committees of the HSBC Holdings board.

Kaur joins HSBC from Deutsche Bank, where she has been global head of group audit since 2011. Since beginning her career with Ernst and Young in 1986, she has held senior audit, compliance, finance and risk management positions at Citigroup, Lloyds TSB and the Royal Bank of Scotland.