Speculation rife over HSBC chairman's successor

8th September 2010, Comments 0 comments

The abrupt departure of HSBC chairman Stephen Green to become Britain's trade minister sparked widespread speculation on Wednesday over who will lead Europe's largest bank.

Green, a 28-year veteran at Asia-focused HSBC, was appointed Minister of State for Trade and Investment by Britain's coalition government Tuesday.

He will take up his new role in early 2011 after stepping down from HSBC's top job before the end of this year.

Financial industry speculation has pointed to the bank's chief executive Michael Geoghegan or former Goldman Sachs president John Thornton as Green's most likely successors, according to reports.

However, a hurdle to Geoghegan, 56, getting the chairmanship is his current position as chief executive, the Wall Street Journal said on Wednesday.

He was recently relocated to Hong Kong to emphasise the bank's Asian focus.

"In the (United Kingdom), tapping an executive director for the role of chairman is seen as poor corporate governance and could antagonise bank regulators and politicians," the Journal said on Wednesday.

Green has been a vocal supporter of prudent corporate behavior at HSBC, which is one of the few large banks that did not tap government bailout funds during the global financial crisis.

Placing Geoghegan in the chairman's seat could see Stuart Gulliver, HSBC's highly-paid investment banking chief, promoted to chief executive, the Financial Times said.

Others speculated that the bank would appoint a non-executive director with Thornton, who is an HSBC board member and non-executive chairman of HSBC North America, as a likely contender for the chairman's job.

But given HSBC's quest to distance itself from the excesses of investment banks during the financial meltdown, Thornton's association with scandal-plagued Goldman Sachs could be a strike against his appointment, one person familiar with the bank told the Journal.

Former HSBC chief David Eldon told the daily Hong Kong Economic Journal: "As everyone knows, (HSBC) has been seriously studying for some time whether the chairman post should be a non-executive role."

Other possible candidates could include non-executive directors Simon Robertson, 69, and Rona Fairhead, 48, the current chief executive of Pearson PLC's Financial Times Group and head of the HSBC board's audit committee, reports said.

HSBC said in a statement that it had already been working on its chairman's succession for some months, including hiring external advisers to find a candidate.

"It was always the Board's intention that it would be in a position to approve a successor to Mr Green before the end of the year, and that timetable remains on schedule," the statement said.

© 2010 AFP

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