Chairmen and chief executives are rare breeds; CEOs and chairs of banks are rarer still. So one might think they should be protected species. Yet over the past week announcements of departures of bank CEOs have become astonishingly common: four at the last count. With scarcely a protest.
That may be partly because, despite the recent history of the financial sector, all but one of these chaps is quitting on at least a relative high. The group is not made up of old men (although, unsurprisingly, they are all men) or exclusively of people who are past it in other ways.
Of course, most presided over the disasters of 2008 and beyond in the financial world. But shareholders didn’t rise to the challenge of getting rid of them then and in most cases aren’t dissatisfied with them now. In the heat of the fire, other bank leaders – from Citigroup, Merrill Lynch, Royal Bank of Scotland, Société Générale and Bank of America – did go under pressure, but the individuals now leaving HSBC, Lloyds and Barclays all hung on to their seats.
This last list does not include the fourth quitter, Alessandro Profumo, CEO of Italian bank UniCredit. Profumo – a name forever associated with call girls, philandering politicians and spies, at least for those of us who recall London’s swinging 60s – was seen to have over-reached himself on the acquisition trail. And the final straw for many was his support for a Libyan stake in the bank of 7.5 percent.
Profumo is the exception among this group, however, and I’m more interested in the prospect of HSBC replacing departing chairman Stephen Green with CFO Douglas Flint. That’s because for people with an interest in investor relations – from either the investment community or the corporate perspective – that can only be a good thing. Flint has been consistently among those at or near the top of the list of CFOs most respected for their contribution to IR in the IR Magazine Awards for some years now.
Just listen to one of the comments made about him by analysts and portfolio managers in the awards research: ‘HSBC publishes a 450-page annual report and, on the day of release, Douglas Flint can point to the exact page to answer any query. That’s impressive.’ So it is.
Flint isn’t praised solely for his grip on the detail, however, but also for his understanding of the impact of global events, which goes beyond the financial issues. So as one portfolio manager says of him: ‘He has a fantastic grasp of what’s going on in the world and a thorough and deep understanding of banking.’ To me, that suggests he’d be pretty ideal as chairman of a global bank.
Yet there are murmurings that promoting the CFO from a role below the CEO to one above that post is a hazardous step. For me, the odd ticklish step is worth the risk. More than that, surely the role of chairman is, crucially, to safeguard the interests of the owners of a company. Who better to do that than someone who has true mastery of its numbers; who inspires faith among the investment community; and who has a wide-ranging interest in and understanding of developments on the global stage on which his bank is an important actor?
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