It really is time to put the lid on it!
After a couple of weeks of a media feeding frenzy based on whispered half truths, appalling leaks from people who I assume should have known better, speculation and speculative "analysis" - it is time to calm down and think of the future for the Bank.
The "leaks" were inexcusable. I don't care what folk say about "public interest" - because that can be their only "so called" defence for telling anyone - but when things are in a state of flux it is surely better to get them resolved than indulge in a "nomination by media" exercise. Or in Mike Geoghegan's case - "vilification by media". How times have changed. We saw the beginnings of a more loose-lipped Board - or those very close to it - when the news broke prematurely about Geoghegan's move to Hong Kong. Without any conversations at all about that particular matter in advance, the information was volunteered to me in intricate (and accurate) detail by someone well removed from the Board. It was a sort of "I expect you know already ..." type of conversation. I didn't.
But look, it might have been ugly but a win's a win and we have to move on.
Mike Geoghegan I met as a young man in the Middle East - I actually think it was on a rugby pitch the first time, but our paths have crossed many times since then - none so closely though as when we worked in the Bank's Mongkok office in the early 80s. He was then showing the right signs of leadership and ability, and I am sorry about the manner of his departure. It could have been handled so much better - and I hope that any companies out there who have been reading the negative commentary about Mike put it all into perspective. Mike is tough, rough and gets things done. He has considerable charm - although I do admit there are occasions when you have to find it, and he does not suffer fools gladly. There will be many, certainly inside the Bank, who will see Mike's tenure as positively transformational. Those less able may welcome his departure (although that underestimates Stuart Gulliver).
He will handle all of this with dignity, no matter how much he may hurt inside, and I wish him well.
[Oh, and STOP all this silly speculation about his "pay-off". Much of what he might receive in the future will depend on how the Bank performs and it is not cast in stone. And that is something I can testify to from somewhat bitter experience. But that is another story - and it's private!]
And so to the future. Messrs Flint and Gulliver will make a great combination for the future of the Bank.
I know there are those who would have preferred to see the change at the top come from the outside, in the shape of an Independent non-executive Chairman. But this is a regulatory and market "preference" - and it's also "comply or explain". The Bank chooses to explain - and the Bank's results do not seem to have suffered as a result of following a tried and tested tradition. What would an Independent Non-Executive bring that someone with the skills of Douglas Flint could not bring? If anyone thinks Douglas is a "patsy" who will not have the interests of all constituents of the Bank at heart - then they don't know the Bank or its people at all.
Stuart Gulliver is a person to watch - always has been. He is highly intelligent and very articulate. I see he is being "criticised" already for being an "Investment Banker" - well he does run the investment bank in HSBC, but again - if you don't understand Stuart, get to know him before you start writing rubbish about him. I have no doubt in my mind that he will step right up to the plate and continue to perform as well in his new role, just as he has in the past.
Having already been regaled with stories of dinners at plush restaurants in London prior to Mike's decision to move on (a week before he was supposed to have threatened to step down if he didn't get the top job), I hope we are not going now to be subjected to two weeks of analysis of the new team and what they can do wrong. They have more than sufficient ability, and are supported by a highly competent team of executives around the world. Let them prove themselves, and go find other victims to write about.
I see that already the focus has now changed slightly to the future role of Mr. Thornton with HSBC and the fact that he might himself step down. That, it seems, would be a pity from the perspective of some but if his skills were China related (forget the fact that he was an Investment Banker and an American - two issues that seem to have unsettled some), then I think there are plenty of others out there with good China credentials too.
So - let's now all get on with our jobs!
So fun article is! I know more from it.
Posted by: Moncler Daunenjacke | 30 December 2011 at 21:41
Slight typo in my post.... I meant to say that I appreciate the opportunity to post my opinions here, not that you should appreciate me doing so !!
Sorry
Posted by: Henry | 30 September 2010 at 15:53
Interesting blog post and follow-up discussion.
Mr. Eldon's point above regarding the supposed superiority of non-executive chairmen is well taken; the case for it is largely political and regulatory, not based on results.
As for Mr. Gulliver, whom I know only through press reports, it seems he is known and respected for his risk management skills, not as a reckless dealmaker. Hurling at him that most foul epithet, "investment banker", does not seem to capture accurately his career history.
Somewhat hard-heartedly, I admit to having very little sympathy for Mr. Geoghegan, as the inescapable conclusion is that his own words and behaviour must have contributed greatly to its messy denouement.
Overall, I think the management changes are net positive for the Bank. I wish Mr. Flint and Mr. Gulliver well.
Posted by: Peter | 30 September 2010 at 08:20
I absolutely don't mind the comments at all. I have heard the points you have raised also put out by others, and understand there are concerns. We don't live in a perfect world.
I think to point (1), the bank chooses to explain its actions because it believes the action it takes is in the best interests of the shareholders. The Nomination Committee consists of a majority of INEDS. I think that says something. And when the time is right for the Chairman to be an Independent Non-Executive Director, I am sure they will do that too.
To your second point, I think the comments made in places like the media about the "inadvisability" of having an Executive Chairman of the Bank ignores the comments of the professionals - the analysts who DO by and large understand the Bank. They should be the people, the check and balance you rely on to ensure that this is not a "closed boys club" - and I think the Bank, by the way, is very transparent. Whilst I know there is a preference in the market to appoint non-executive directors as Chairmen, I am unconvinced that they have collectively done a better job than those who know the organisation. I do not think "one rule fits all" and In fact, I think the USA is beginning to question the wisdom of having outsiders Chair companies they know little about.
Lastly - Stuart Gulliver has been credited with steering the Bank successfully through one of the most economically challenging periods of recent history. He has been in charge of the investment bank - and media reports have all labelled him as an "investment banker" as you have done, but I have not yet read a media report - and I am reading lots, that has singled him out as being irresponsible, reckless, fickle or any other adjective you can think of - in fact they have been unanimous in their praise.
As to loyalty - sadly it seems to be a commodity that is rather lacking today where all we want to do is disassociate ourselves from "difficult situations". This has not been pleasant for the Bank, but I, for one, am satisfied they will come through it successfully.
Posted by: David Eldon | 29 September 2010 at 22:18
David, you are very loyal to the bank and it's people and that's great, but there are a few points on you might perhaps be less loyal
1) The bank chooses to "explain" why it has a non-independent executive director with an implication that it's tradition and the assertion that it's results haven't really suffered (of course nobody really knows that). These seem poor reasons to fly in the face of regulatory and industry expectations.
2) "If anyone thinks Douglas is a "patsy" who will not have the interests of all constituents of the Bank at heart - then they don't know the Bank or its people at all" Exactly the point - we don't know the bank or it's people at all, and we cannot be expected to. The bank is not (or should not be seen to be) a closed boys club. Appointing a non executive independent director is a vital gesture (as well as the right thing to do from a corporate governance perspective)
3) Stuart Gulliver is already being criticised as an "investment banker". Absolutely! Rightly or not, his appointment right at this time, following the worst financial crisis in several generations, caused primarily by the work of investment bankers, is "insensitive" to say the least (I wanted to use much stronger language there....)
I hope you don't mind and appreciate the opportunity to post my opinions here
Posted by: Henry | 29 September 2010 at 21:17
Finally I got to read it! An absolutely cracking piece. Well done.
Posted by: Cristina | 29 September 2010 at 20:21
Royingfai, I think you have just proved the point that learning things by heart is no substitute for using judgement, intelligence and common sense.
Or maybe I didn't write the Blog clearly enough for you to understand. Or did you actually read the Blog? It would seem not.
Posted by: David Eldon | 28 September 2010 at 13:01
Congratulations Royingfai on missing the point.
Posted by: Andrew | 28 September 2010 at 12:48
As Bob Tricker's student in Corporate Governance, I have to say that Geoghegan was acting like Michael Eisner (Disney) or Lee Iacocca (Crysler). How could the board put up with such a powerful character? Where's the checks and balance? How could someone dare to believe that he must be the next Chairman?
Posted by: Royingfai | 28 September 2010 at 10:16