Saturday, 25 September 2010

Hopelessly Stumped Banking Corporation

HSBC is a solid, and perhaps staid, bank. It rode the financial crisis reasonably well and generally stays out of the headlines. Surprising then to see it on top of the financial news for the last five days thanks to a messy succession saga.

Here's what happened. Successions in HSBC are very orderly. The Chairman retires to tend to his garden somewhere in the English countryside. The CEO becomes the Chairman. The senior most executive being groomed for years, takes over as CEO. All very dignified and solemn. The Board congratulates itself over many glasses of the finest bubbly. The money continues to pour in and all is well in the world.

This time the script went wrong. Stephen Green , the current Chairman, had indicated in May that he wanted to retire in a year's time. A search firm was duly appointed to recommend that there were no suitable outside candidates so that the pesky shareholders can be told to keep quiet. But suddenly Stephen Green was asked to join the UK cabinet as Trade Minister. The garden could wait. Off he decided to go, some months in advance.

So they had to appoint a Chairman "quickly". To complicate matters, there was an outside candidate who would be eminently qualified. John Thornton, ex Goldman Sachs, who famously gave up a shot at the top Goldman post some years ago to move to Beijing and teach at the Tsinghua University. He was already a non executive director of HSBC and apparently was interested.

In stepped Michael Geoghan, the current CEO of HSBC. He couldn't believe that they were really thinking of not giving him, what was his "right". He said  - No way John Thornton. Perhaps even, "over my dead body". Stalemate. The Board didn't want to give it to Geoghan either- he was a bit too brash and they didn't like him all that much. So if not Geoghan, who else ? The insiders were up in arms against any outsider coming in.

So they plumped for Douglas Flint, the current CFO as Chairman. But this left Geoghan in a quandary. His subordinate was going to become his boss. He wouldn't accept that and decided to quit as well. Up stepped Stuart Gulliver who was being groomed for the CEO's job anyway, but which landed on his lap some years ahead of time.

All round dissatisfaction and tut-tutting. New Chairman and new CEO, all in the space of one week. Of such politicking are boardrooms made of. Now nobody is sure if the money will continue to pour in. Or the flow of the bubbly, for that matter.

So here's material for a Kollywood typical, starring Rajnikanth as Stephen Green, Vijay as Geoghan, Surya as Gulliver, Vikram as Flint , Prakash Raj as Thornton and the delectable Asin as the tea lady !

PS : This blogger is constrained to disclose that he banks with the said bank !


Sandhya Sriram said...

wow ramesh,

after you have come back to india, you are in full swing in indian movies of all languages....

From board room to kollywood - what a width you cover!! you are amazing.

i hope your invite in the last but one blog is still open :-)

Anonymous said...

LOL :) uhum ella roleskum ungalaye morph panni potra vendi thaan :)

Ramesh said...

@Sandhya - No No, I am as clueless as aware; just picked names at random courtesy Google ! Yes, very much on ; shall fix up.

@Gils - No chance. Incidentally, why the long silence on your blog. Blogworld without Gils is very bleak.

gils said...

thala ungala thaan en blog pakkam aalay kaanum :)

zeno said...

I do agree that your blogging spree has come down considerably!
I felt very happy after seeing many cine star names alas too bad you have googled them :(
The PS was truly PS too small almost missed it!
One blog request! a blog post on the differentiation between CEO, chairman, some people being both the CEO and chairman, executive director non executive chairman!

Ramesh said...

@zeno - Yes, I've become very slack. Someday I hope to regain my mojo. Till then I'll soldier on, even if intermittent !

Thanks for the idea for a future post.

Deepa said...

Drama is the order, in the current affairs I guess. The goings-on of the past few days have been nothing but filmy, be it sports, be it politics, markets...!

Vishal said...

Perfect masala for a Kollywwod (or bollywood for that matter) flick... Completely agree with Deepa. Drama comes in package!

Ramesh said...

@Deepa - Indeed, too much drama. Where are the strong silent types .....

@Vishal - Masala indeed, although it was rather gentlemanly, at least from the outside.

Vinod said...

I used to work for the said bank and have some great memories from my experience there. It almost feels like it is Test match that they are playing out there. The game is changing - maybe its the times. Hope the bank manages to choose the right team and continue to win trophies.

Ramesh said...

@Vinod - Oh, this is but a mere blip in the bank's story. Its a solid giant and won't get shaken so easily. Everybody who's worked here even for a while, would be very proud of the association, I'm sure.

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