Company: HBCYF
Filing Date: 2025-02-20
Form Type: 20-F
Source: 0001089113-25-000040
Chunk: 408

Company: HSBC HOLDINGS PLC
Filing Date: 2025-02-20
Form: 20-F
Chunk 408
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 leadership of the GAC during his time as Chair. Internal controls have been a key focus during 2024, and the GAC assumed responsibility for the oversight of all internal controls - which was previously limited to those related to financial reporting. We have overseen management’s proposed enhancement of controls, including the creation of a new Group Chief Controls Oversight Office function. This will enhance effective operation and monitoring of the Group’s control environment. This will include the work to support preparations for the Board's declaration on the effectiveness of material controls, which will be required from 2026 under the 2024 UK Corporate Governance Code. Given changes in the external operating environment and as a result of the reorganisation of the Group, the GAC will have an important role in monitoring the impact on the control environment during this period of change. A key element of this continues to be our progress in enhancing the control environment regarding the Group’s regulatory reporting obligations. Remediation of errors in regulatory reporting and achieving a sustainable controls environment over these returns, remains a priority for the Committee, management and our regulators globally. Further details on progress under this programme can be found later in this report. The GAC received regular updates from the Group Chief Financial Officer and Global Financial Controller on key financial reporting issues and the related management judgements. These included spending significant time on the appropriateness and clarity of the Group’s market guidance, including in relation to returns, costs and expected credit losses (‘ECL’). Given the uncertain global macroeconomic environment, the GAC carefully considered its disclosures on ECLs, in particular those relating to the Group’s exposure to the mainland China and Hong Kong corporate real estate sectors. I have spent time with several of the subsidiary audit committee chairs, building on the important connectivity between the Group and subsidiaries established over the past few years. Regular engagement with our subsidiary audit chairs will continue to be an important part of the GAC’s governance practices through 2025 and beyond. The GAC also oversaw the External Quality Review of the Global Internal Audit function during the year, which was conducted by Deloitte in accordance with the Internal Audit Code. I am pleased to report that the function is highly valued across the HSBC Group, and received a ’Generally Confirms’ rating, which is the highest attainable under the internal audit International Professional Practices framework. Finally, I was pleased that the review of the GAC’s performance concluded that the GAC continued to operate effectively. Further details on the review, which also considered the performance of the Board and