HSBC Business Principles and Code of Conduct: Values, Risks, and Ethics, Lecture notes of Business

Download HSBC Business Principles and Code of Conduct: Values, Risks, and Ethics and more Lecture notes Business in PDF only on Docsity! 1 PUBLIC HSBC Holdings plc Statement of Business Principles and Code of Conduct 2 PUBLIC Table of contents Summary 3 Introduction from our CEO 4 HSBC Group Values and Principles 5 Managing conduct 7 Managing risk 8 Respect for the law 9 Respect for all 12 Protecting company assets 13 Conflicts of interest 15 We take responsibility for Our Customers 17 Supporting sustainability 18 Compliance, reporting violations and asking questions 19 5 PUBLIC HSBC Group Values and Principles Our values guide us in all our actions – from strategic decisions to day-to-day interactions with customers and each other. They are rooted in HSBC’s history, heritage and character, and help us deliver on our purpose. They underpin our culture and set out the behaviours we expect. We value difference Seeking out different perspectives We were born speaking different languages. We were founded on the strength of different experiences, attributes and voices; they are integral to who we are and how we work. The greater our empathy and diversity, the better we reflect the worlds of our customers and communities – and the better we can serve them. So we champion inclusivity. We listen. We remove barriers. And we seek out views different from our own. 6 PUBLIC We succeed together Collaborating across boundaries We offer our customers a unique breadth of opportunity. And we can only deliver the full promise of this by being truly connected – across boundaries. With our customers and partners. Together as colleagues and as an organisation. So, we collaborate across boundaries. We break down silos. We trust and support each other. And, when necessary, get out of each other’s way. Together, we make possible what we cannot do alone. We take responsibility Holding ourselves accountable and taking the long view What we do has a real impact on people’s lives, communities and the planet. We take this responsibility seriously. We set ourselves high standards and are each accountable for our actions. We always use good judgement. And if something doesn’t feel right, as colleagues we speak up and act. We build for tomorrow, today. We succeed only by taking the long view, by focusing on the sustainable interests of our customers, investors, and the planet we all share. We get it done Moving at pace and making things happen We create value for our customers and investors by always moving forward and making things happen. We’re entrepreneurial: we try new things, we learn and improve, and we take smart risks. We’re dynamic: we reject mediocrity. We move at pace. We’re decisive: we make clear choices and take bold actions. And we keep our word: we always do what we promise. All our values help us deliver on our purpose: By valuing difference, we actively take a broader perspective, and so are alert to more opportunities for our customers across our network. By succeeding together, we make the connections that allow us to realise the full potential of those opportunities. By taking responsibility, we ensure we leverage those opportunities with integrity. By getting it done, we commit to tenaciously following through on the actions that make those opportunities a reality. 7 PUBLIC Managing conduct Good conduct is about collectively taking responsibility and individually each being accountable for our actions – recognising the real impact our actions have for our customers and the financial markets in which we operate. The Conduct Approach provides five outcomes to guide us in all our actions: 1. We understand our customers’ needs  …and design, market and sell products and services that recognise the long term interests of customers. 2. We provide products and services that offer a fair exchange of value  …which balance customer and HSBC interests and do not undermine market competition. 3. We service customers’ ongoing needs, and will put it right if we make a mistake  …ensuring products and standards of service continue to have a positive impact. 4. We act with integrity in the financial markets we operate in  …acting in our customers’ interests and not in ways which manipulate or undermine markets. 5. We operate resiliently and securely to avoid harm to customers and markets  …across digital, physical and operational arrangements to support customer needs and wider financial system stability. For more information on our approach to Conduct, visit https://www.hsbc.com/who-we-are/esg-and-responsible-business/our- conduct Speaking up HSBC continues to create a speak-up culture. In line with our Global Principles, HSBC promotes open and honest communication, providing support and protection for people raising concerns. HSBC does not condone or tolerate any acts of retaliation against those who speak up. HSBC encourages individuals to raise concerns through usual escalation channels, including via Line Managers, HR or Compliance. However, we understand there are times individuals may not feel comfortable speaking up through these channels. HSBC’s global whistleblowing channel, HSBC Confidential, allows colleagues and other stakeholders to raise concerns confidentially, and if preferred, anonymously (subject to local laws). Concerns are investigated proportionately and independently, with action taken where appropriate. Speaking up | HSBC Holdings plc 10 PUBLIC Market Abuse HSBC works to protect market integrity by aiming to prevent, proactively identify, and appropriately respond to actions and behaviours that could constitute market abuse. HSBC does not allow improper or personal use or sharing of non-public information about HSBC or its affiliates, customers or suppliers. Access to such information must be guarded carefully, following HSBC’s procedures for handling confidential information. Laws, regulations and HSBC policies also apply to and restrict each individual’s outside activities and personal investments. HSBC also seeks to identify and prevent other types of market misconduct. HSBC has specific controls, including information barriers where information is either considered to be inside information or material non-public information, in different jurisdictions. Under the Purpose Led Conduct approach, HSBC takes responsibility recognising the real impact we have for our customers, and the financial markets in which we operate. Anti- Tax Evasion Facilitation HSBC is committed to complying with the letter and spirit of all applicable tax laws. Tax evasion is a predicate offence for money laundering. The Global Anti-Tax Evasion Facilitation Policy sets out the key principle and minimum control requirements to apply a consistent and standardised approach to both managing the risk of customer tax evasion and facilitating or failing to prevent the facilitation of tax evasion. HSBC must have reasonable procedures in place designed to prevent tax evasion facilitation by any third party acting on behalf of HSBC. Individual Permissions and Regulatory Approval Every regulated HSBC Group company must ensure all of its directors and employees hold all required regulatory approvals, licences or permissions. Each HSBC Group company must also be able to demonstrate that those individuals meet the required regulatory standards, such as those necessary to undertake regulated activities or roles, or oversight of regulated activity. Investigations Subject to certain regulatory exceptions, all Directors, employees and contingent workers are required to co-operate with any legitimate and lawful government, regulatory or internal investigation. They must tell the full, complete truth in such inquiries and are expected to provide the maximum level of cooperation by, among other things, being available to those conducting the investigation and by providing any materials requested by those conducting the investigation in a timely manner. A lack of co-operation with an investigation may lead to sanctions, including termination of employment. Fraud It is everyone’s responsibility to report acts of fraud or suspected fraud. HSBC manages fraud risk by maintaining and communicating appropriate policies and procedures, training employees in them and establishing appropriate monitoring activity to ensure they are observed. Proactive risk management is applied and control frameworks are in place which are adjusted dynamically as the external fraud environment develops. These measures are also designed to complement our ability to fight financial crime, detecting suspicious activity and possible criminal networks. Sales Practices All employees must act in the interests of prospective and actual customers. HSBC wants to protect, support, and promote the principles of consumer choice, competition and innovation, consistent with relevant laws and regulations and our obligations to HSBC shareholders. No one should knowingly participate in actions, agreements, or policies or practices that may be detrimental to customers, competitors or the community. HSBC strives to ensure that our products and services offer fair value and service to our customers at reasonable cost. 11 PUBLIC Data Privacy Business must be conducted in compliance with the HSBC Data Privacy Principles. These reflect applicable data protection, privacy, banking secrecy, electronic communications and confidentiality laws and regulations to ensure a consistent, accountable, global approach to data privacy compliance. They articulate HSBC’s high-level commitments to handling and using the data it collects, generates, holds and/or processes in accordance with the following principles:  Transparency  Fair and lawful usage  Limited purposes  Minimal and Adequate data  Data Accuracy  Privacy by design  Record Keeping  Rights of Individuals  Data Security and Retention  Usage by third parties  Data transfers. Our Directors and employees must observe strict confidentiality about information the HSBC Group holds. This includes information about any and all transactions (including on customer accounts and matters relating to their business or personal affairs) of the HSBC Group and of each HSBC Group company with their respective customers, suppliers or associates. This also extends to dealings, procedures, policies, decisions, systems and other confidential matters of and concerning the HSBC Group except when the employee is required or authorised to disclose such information by the HSBC Group or by law or regulation. Any breaches, including unauthorised ‘browsing’ of accounts, are likely to lead to disciplinary action and may result in dismissal for gross misconduct. Sarbanes-Oxley Act Compliance In addition to the Group Code, the Group Chief Executive, Group Chief Financial Officer and Group Chief Accounting Officer or persons performing similar functions (the ‘Senior Financial Officers’) are subject to and must comply with the following principles:  Each Senior Financial Officer shall engage in honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships.  Each Senior Financial Officer shall avoid conflicts of interest and shall disclose to the Chairman of the Group Audit Committee any material transaction or relationship of which they are aware that reasonably could be expected to give rise to such conflict.  Each Senior Financial Officer shall take such measures as appropriate to ensure that HSBC complies with all applicable governmental laws, rules and regulations and provides full, fair, accurate, timely and understandable disclosure in reports and documents that it files with, or submits to, any securities regulatory authority including the Financial Conduct Authority and the Securities and Exchange Commission and in other public communications it makes.  Each Senior Financial Officer shall report promptly to the Chairman of the Group Audit Committee any violations of this statement of Sarbanes-Oxley Act principles of which they are aware.  Each Senior Financial Officer shall be accountable for adherence to this statement of Sarbanes-Oxley Act principles. PUBLIC Respect for all At HSBC we value difference and champion inclusivity. HSBC is committed to diversity and equal opportunity. HSBC requires our Directors and employees to treat one another with dignity and respect, creating an inclusive environment. HSBC does not tolerate discrimination, bullying, harassment (including sexual harassment) or victimisation on any grounds, and treat any of these as a disciplinary matter. At HSBC, we take responsibility. We set clear standards and we require our employees, as part of their conditions of employment, to act with the utmost integrity and honesty in all their personal and business dealings. These standards apply in the course of our work and in all professional interactions with colleagues, customers, regulators and vendors in the work environment, at social or corporate events, or when using electronic communications, technology or social media platforms. HSBC operates HR services such as recruitment, performance and reward in a way that is fair and free from unlawful discrimination. HSBC asks our employees to speak to HR about breaches of any code of conduct where it is lawful to do so. HSBC also requires employees to report matters such as criminal convictions and investigations by a former employer or regulator, where this is not precluded by local law. HSBC has zero tolerance for acts of retaliation against anyone who raises a concern in good faith. HSBC treats retaliation in those circumstances as a disciplinary matter. 1115 PUBLIC Directors and employees are responsible for managing their personal interests in such a way that they do not profit improperly from their position at HSBC nor do they allow these to give rise to conflicts of interest that negatively impact upon HSBC, HSBC clients or the financial markets in which HSBC operates. When an employee encounters a personal, business related or other types of conflict of interest in conducting their role at HSBC, they must disclose it promptly to their immediate line manager who will consult with relevant risk stewards, including Compliance, to appropriately manage it. Personal conflicts of interest are managed by the implementation of a variety of measures; including:  Pre-approval of Outside Activities/Personal Account Dealing and disclosure of close personal relationships conflicts  Information control measures e.g. information barriers  Declining to act e.g. recusing an individual from decision-making on the relevant subject and ensuring this is recorded in any minutes of the meeting  Segregation of duties e.g. conflicted individuals not supporting a particular customer sector or deal team  Preventing the conflict from arising e.g. resigning from an outside activity The Global Conflicts of Interest policy binds everyone to disclose and manage conflicts of interest, or face a personal conduct case with the potential to be dismissed from their employment at HSBC. Directors are specifically bound by a Conflicts of Interest Policy applicable to the Board. Outside Activities Engaging in outside activities could give rise to potential conflicts of interest. This may include:  Holding any outside employment position or conducting personal business that may give rise to potential conflicts of interest Conflicts of interest 15 1116 PUBLIC  Holding a direct or indirect financial interest in a competitor company or in any firm or entity with which HSBC does business (except normal investments in publicly-owned companies provided they do not give rise to potential conflicts of interest)  Holding a significant direct or indirect financial interest in any firm or entity that is a supplier of or vendor for HSBC (except normal investments in publicly owned companies provided they do not give rise to potential conflicts of interest)  Holding or acquiring an interest in any property or business in which HSBC has or proposes to acquire an interest  Running for political office  Serving as a director or officer of any firm that is a competitor, customer or supplier of HSBC Employees must complete the outside activities review process before commencing any outside activity. This allows HSBC to analyse, decide whether to allow, then record and manage the potential conflict risks associated with the outside activity (if any) before they arise. Connected Party, Friends and Family Conflicts Connected party, friends and family conflicts arise if an individual’s decisions appear to affect someone close to them – For example; the relationship influences or could influence their judgement, decision making, their independence of mind - impacting how they conduct their duties as part of their employment at HSBC. As a result, this may negatively impact on HSBC; HSBC workers; HSBC Clients; HSBC Third Parties; or the financial Markets in which HSBC operates. Any such relationships should be disclosed to the employee’s line manager and relevant action taken to ensure that related risks are appropriately managed. Employing Relatives HSBC expects a high level of integrity, objectivity and professionalism from all employees. In keeping with these standards, HSBC may permit the employment of relatives where internal policy requirements are met. Key aspects of internal policy include independent decision-making and disclosing any actual or potential connections. Relatives are not allowed to be recruited into a position that presents a conflict of interest to the employee. Any employee who may have a conflict must notify HR and Compliance to get advice. 17 PUBLIC We take responsibility for Our Customers HSBC and its Directors and employees through our Values and Conduct Approach are dedicated to recognising the impact for our customer and the financial markets in which we operate. HSBC will offer products and services on a competitive basis and will not tolerate the use or attempted use of improper incentives to obtain business. With regard to suppliers, the selection of products and services by employees with purchasing duties for HSBC is based solely on quality, price and service. HSBC should never take unfair advantage of anyone through manipulation, concealment, abuse of confidential information, misrepresentation of material facts, or any other unfair-dealing practice. Practices are considered unfair, deceptive or abusive if they:  Cause or are likely to cause substantial injury to consumers  The injury is not reasonably avoidable by consumers  The injury is not outweighed by countervailing benefits to consumers or to the competition  Represent, omit or practice something that misleads or is likely to mislead the consumer and/ or the misleading act or practice is material or materially interferes with the ability of a consumer to understand a term or condition  Takes unreasonable advantage of a consumer’s lack of understanding of the material risks, costs, or conditions of the product or service; a consumer’s inability to protect his or her interests in selecting or using a consumer financial product or service; a consumer’s reasonable reliance on a covered person to act in his or her interests.