It will take weeks to clean the blood from the walls of the HSBC boardroom. The battle which just ended pitted the 37 year veteran against a mound of shareholders who just wouldn’t be bullied around. The end result – Mike Geoghegan is ousted as chief executive. Stuart Gulliver, head of the investment banking arm of HSBC, sails past the position of chief executive and is named chairman. And Douglas Flint, finance director of HSBC, is promoted to the position of chief executive.
The boardroom upheaval is unprecedented and follows days of speculation. Geoghegan practically threatened HSBC, well lets say the shareholders of HSBC to leave the bank unless he was promoted to the position of chairman. We are talking about a guy who picked up his life and moved to Hong Kong, the moment the bank made the request.
Although he spent four years as chief executive, the shareholders were placed in a possibly compromising position. If they promoted him after the threat, it would appear as if one man held the shareholders ransom. At HSBC, that was not going to happen.
This battle was poorly timed for HSBC, or any bank, during such tumultuous times. The last thing a bank, or any major corporation is seeking during economic unrest is a possible variable to cause instability. By tradition, banks rarely replace two such boardroom posts at the same time for fears of immediate instability.
What other high ranking board members can take from this example – keep your temper and your threats in perspective and you will ultimately end up in the position you deserve.