Trouble at top of HSBC as bank furiously denies CEO quit threat

Britain's biggest bank appears to be in a lose-lose situation

The battle to succeed Stephen Green as chairman of HSBC has turned ugly. The bank took the unusual step of issuing an angry, and public, denial of a report in the Financial Times that chief executive Michael Geoghegan had threatened to quit if denied the top job. In it, spokesman Patrick McGuinness said: "It is nonsense that the group CEO threatened to resign unless he was appointed chairman. The suggestion is offensive to Mike and to the company. As previously stated, the board is working under due process to finalise HSBC's succession plan following Stephen Green's already announced departure and this proceeds in line with the scheduled timetable."

Angry denial it may have been, but it took quite some time for the statement to be made: it flashed up on the newswires at 3.10pm UK time yesterday, 10.10pm Hong Kong time. Hong Kong is where Mr Geoghegan, moved amid some fanfare (and with an £800,000 relocation package).

Its seems unlikely that Mr Geoghegan, nor anyone close to him, leaked the alleged "threat". It could only damage him and heighten the questions about whether he is really the right man to serve as chairman, a job which requires the incumbent to gladhand with the City, with regulators and with the politicians who have so much influence over HSBC's business these days.

The delayed denial, however, is an indication of just how sensitive and difficult the issue has become for a bank that likes to portray itself as a model of corporate stability.

HSBC's board will meet next week to finally settle the vexed question. But in previous years there has never been a question. The chief executive has just seamlessly stepped into the chairman's shoes. That was how Mr Green assumed the top job after the departure of Sir John Bond.

But Mr Geoghegan is not Mr Green. The latter believes in God, the former sometimes gives the impression that he thinks he is one. During an early results presentation after being made chief executive, journalists were treated to a lengthy and self-aggrandising presentation on HSBC's marvellous businesses around the world and the roles he performed for them. This at a time when the company was still reeling from its disastrous foray into US sub-prime loans which resulted in the first profit warnings in its history.

No one denies Mr Geoghegan's talent. He steered the bank through the financial crisis with some skill, and the purchase of Household in the US business was Sir John's signature deal, not his. He's also managed to smooth some of the rough edges.

But he remains a bruiser. And with shareholders restive over the bank's attempt to hand him a bumper pay rise (and over that relocation package) his appointment could easily create a squall that the bank would rather avoid. However, passing him over would be seen as a slap in the face. Hence the story and the furious but belated response.

All this threatens to make the new chairman's task very difficult. Working with a wounded Mr Geoghegan could create tensions, particularly with John Thornton, the former Goldman Sachs banker who is currently a non-executive director. He might be the favourite among many commentators, just not so much with Mr Geoghegan.

The there's the question of Stuart Gulliver, the head of the investment bank who might have hoped to succeed Mr Geoghegan. All this with the top job at Lloyds up for grabs. Douglas Flint, the finance director, has been mentioned as a compromise candidate, as has Simon Robertson, who is leading the succession process. But whoever ultimately succeeds, HSBC, unusually, has allowed itself to get into a lose-lose situation.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower