29 Nov 2005

HSBC manages a smooth succession

The promotion of Chief Executive Stephen Green to Chairman shows the dilemmas created by the governance code of practice. In an ideal world the ultimate owners would be intimately involved in controlling the executive management of a company and select the managers directly rather than delegating power in effect to a self-perpetuating hierarchy. But this ideal world does not exist and we have to make do with a 'second best' solution. In HSBC's case, this solution may well be the first choice. The bank has avoided the pitfalls that befell many of its (sometimes more glamorous) competitors, there are no revolving doors in the top management floor and struggles between individuals - if they persist - are kept away from the eyes of the public.