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
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Telesales Executive - OTE £25,000

£13000 - £25000 per annum: Recruitment Genius: Would you like to be part of a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Are you passionate about sale...

Ashdown Group: Graduate Developer (Trainee) - City, London

£25000 per annum + benefits: Ashdown Group: A large financial services company...

Ashdown Group: Marketing Assistant - Financial Services Sector - London

£20400 per annum: Ashdown Group: An established and highly reputable organisat...

Day In a Page

The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

The Silk Roads that trace civilisation

Long before the West rose to power, Asian pathways were connecting peoples and places
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

The honours that shame Britain

Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
When it comes to street harassment, we need to talk about race

'When it comes to street harassment, we need to talk about race'

Why are black men living the stereotypes and why are we letting them get away with it?
International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

International Tap Festival comes to the UK

Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border
Doris Lessing: Acclaimed novelist was kept under MI5 observation for 18 years, newly released papers show

'A subversive brothel keeper and Communist'

Acclaimed novelist Doris Lessing was kept under MI5 observation for 18 years, newly released papers show
Big Blue Live: BBC's Springwatch offshoot swaps back gardens for California's Monterey Bay

BBC heads to the Californian coast

The Big Blue Live crew is preparing for the first of three episodes on Sunday night, filming from boats, planes and an aquarium studio
Austin Bidwell: The Victorian fraudster who shook the Bank of England with the most daring forgery the world had known

Victorian fraudster who shook the Bank of England

Conman Austin Bidwell. was a heartless cad who carried out the most daring forgery the world had known
Car hacking scandal: Security designed to stop thieves hot-wiring almost every modern motor has been cracked

Car hacking scandal

Security designed to stop thieves hot-wiring almost every modern motor has been cracked
10 best placemats

Take your seat: 10 best placemats

Protect your table and dine in style with a bold new accessory
Ashes 2015: Alastair Cook not the only one to be caught in The Oval mindwarp

Cook not the only one to be caught in The Oval mindwarp

Aussie skipper Michael Clarke was lured into believing that what we witnessed at Edgbaston and Trent Bridge would continue in London, says Kevin Garside
Can Rafael Benitez get the best out of Gareth Bale at Real Madrid?

Can Benitez get the best out of Bale?

Back at the club he watched as a boy, the pressure is on Benitez to find a winning blend from Real's multiple talents. As La Liga begins, Pete Jenson asks if it will be enough to stop Barcelona
Athletics World Championships 2015: Beijing witnesses new stage in the Jessica Ennis-Hill and Katarina Johnson-Thompson heptathlon rivalry

Beijing witnesses new stage in the Jess and Kat rivalry

The last time the two British heptathletes competed, Ennis-Hill was on the way to Olympic gold and Johnson-Thompson was just a promising teenager. But a lot has happened in the following three years
Jeremy Corbyn: Joining a shrewd operator desperate for power as he visits the North East

Jeremy Corbyn interview: A shrewd operator desperate for power

His radical anti-austerity agenda has caught the imagination of the left and politically disaffected and set a staid Labour leadership election alight
Isis executes Palmyra antiquities chief: Defender of ancient city's past was killed for protecting its future

Isis executes Palmyra antiquities chief

Robert Fisk on the defender of the ancient city's past who was killed for protecting its future