HSBC has been struggling to find a suitable replacement for its outgoing chair, Sir Mark Tucker.
There is one trending solution open to them if they can't find a replacement: just give the job to the CEO, and combine the two roles, as 40% of S&P 500 companies in the US have already done.
This trend has led to the coining of the term "super‑CEO", but does this kind of streamlining also remove certain checks and balances...?
Why HSBC Can't Just Replace Sir Mark Tucker
The ideal mix of money sense, political acumen, deep understanding of Asia, and the drive to run a global banking behemoth are, it turns out, a rare combination.
HSBC has a presence in two key financial centers—London and Hong Kong—thereby adding geopolitical depth. Experts in governance argue this leads to the paucity of leaders who are bold enough or ready to take on such an unstable mandate
And it seems that a salary of £1.6M a year isn't enough to attract the right person.
The bank has reportedly shortlisted over 100 potential candidates without finding a decent replacement
The UK's resistance to the super CEO...
The majority of US firms merge chair and CEO positions into a single super-executive. The advocates of this model argue that it concentrates leadership and binds strategy to governance Financial Times
However, UK corporate governance tradition strongly favors role segregation which is seen as a safeguard against power concentration, making boards more independent, and offering guidance to CEOs.
The UK Corporate mindset simply sees the chair's governance role as demanding a whole different skill set from that of the CEO. London's investor community is more interested in governance strength than executive strength.
Conclusion: the solution...?!?
HSBC's challenge to replace Sir Mark Tucker highlights the differences in UK and US business cultures.
While the US "super-CEO" model might be enticing to some with its convenience, the UK's insistence on segregation of strategic management from governance arises from a belief that this is more stable in the long-term...
Maybe they could come up with some kind of hybrid solution? Move some responsibilities to the CEO, reduce the scope of the Chair?
Or just merge roles temporarily.
OFC it might come to the point where they live without one for so long, they just merge the roles anyway?!?