After the abrupt exit of its CEO, HSBC has an interim management solution in place, and aims for a chief with a more aggressive, fast-moving leadership style.
The London-based bank said on August 5 that Chief Executive John Flint will step down after just 18 months on the job “by mutual agreement with the board.” Noel Quinn, HSBC’s Chief Executive of Global Commercial Banking, will fill the CEO role in an interim management capacity. “He brings pace. He brings decisiveness. He brings ambition. All of these things are important in the next stage,” said Mark Tucker, non-executive Group Chairman.
The news came the same day that HSBC reported good results for the first half of 2019: After-tax profit rose by 18.1%, and revenue was up 7.6%. Finding context for Flint’s ouster, analyst Benjamin Toms of RBC Capital Markets cited “geopolitical uncertainty.” Trade wars between the U.S. and China and civil unrest in Hong Kong, HSBC’s biggest market, threaten its Asia businesses, which generate 80% of its profits. At home, Brexit remains unresolved.
Leadership style is also a key factor. Tucker, who previously served as Chief Executive of Asian life insurer AIA, came to HSBC in 2017 as the first outsider ever appointed chairman. Described as a hard-charging executive, he was brought in to help the bank accelerate through a point of inflection. Conversely Flint, a safe choice who had been with the bank since 1989, is “a very low-key chief executive in terms of style,” said analyst Joseph Dickerson of Jefferies, an investment bank. “The message is they wanted someone with more energy and drive,” he added.
Tucker echoed the sentiment on a call with reporters, suggesting that the board thought a faster-moving, more aggressive chief executive would be needed to successfully navigate the future business environment, the New York Times reports. “In the increasingly complex and challenging global environment in which the bank operates, the board believes a change is needed to meet the challenges that we face,” Tucker said.
It is certain that the board will have high performance expectations for whomever is appointed to the CEO role. The new leader will have to act decisively, and deliver on financial goals quickly. As S&P Global Ratings noted in a bulletin, “The revamp of key positions indicates that the board has become less tolerant of relative financial underperformance.”
HSBC newcomer Ewen Stevenson, who was appointed as Chief Financial Officer in January, is currently seen as a frontrunner. “Stevenson’s straight-talking approach helped him forge a strong partnership with Chairman Mark Tucker,” Bloomberg noted, adding that a “tough love approach has been a hallmark of his brief tenure.”