HSBC Holdings Plc is likely to pick a successor to Chairman Stephen Green before the end of the month, according to a person with knowledge of the situation.
The board of Europe’s biggest bank may make the decision at a previously scheduled meeting in Shanghai in late September, said the person, who declined to be identified because the discussions are private.
“The board expects to be in a position to approve a succession to Green by the end of the year and that timetable remains on schedule,” said Adrian Russell, a spokesman for London-based HSBC. He declined to comment further on the date of any decision.
HSBC’s independent directors, led by former Goldman Sachs Europe President Simon Robertson, are weighing whether to follow the bank’s tradition of promoting chief executive officers to the post of chairman, or bow to U.K. corporate governance guidelines and name an independent chairman, the person said.
If the board decides against promoting CEO Michael Geoghegan, the most likely candidate to succeed Green is John Thornton, a former Goldman Sachs president who is chairman of HSBC’s North American division, the person said.
Thornton, 56, joined HSBC as a non-executive chairman of its North American unit in December 2008, six months after the division pushed the bank into the biggest write downs in its history. Geoghegan, 56, replaced Green as CEO in 2006. He moved to Hong Kong from London in February this year after working for the bank for more than 35 years.
Insufficient detachment
Promoting CEOs to the chairman’s post was discouraged in a British government-commissioned review of corporate governance in 2003. Two years later, HSBC promoted Green to chairman, explaining the move was necessary “because the company is so large,” a spokesman said at the time.
More From This Section
“We are not supportive of chief executives going to become chairs of the same company,” Pensions Investments Research Ltd., which advises investors on corporate governance, said in a statement. PIRC cited “potential difficulties arising from a former CEO not having sufficient detachment to objectively assess executive management and strategy, or obstructing the ability of the new chief executive” to develop new strategies.
Should the board decide to name Hong Kong-based Geoghegan chairman, candidates to replace him include Asia CEO Sandy Flockhart and Stuart Gulliver, who runs HSBC’s investment bank, the person said.
Green, 61, said this week he would step down to become trade minister for the UK