Mark Kleinman: Tucker’s luck could mean handing over HSBC reins during a trade war
Mark Kleinman is Sky News’ City Editor and is the man who gets the Square Mile talking in his weekly Morning Wire column. This week he tackles HSBC’s chair changeover, the FCA’s recent climbdown, and a mighty job at Mitie.
Tucker’s luck could mean handing over HSBC reins during a trade war
Just as one swallow doesn’t make a summer, so one board appointment doesn’t mark a trend – although, in the case of HSBC, it might just have signalled the beginning of one. My revelation last weekend that Europe’s biggest lender by market capitalisation, is about to kick off a search for its next chairman represents another – in corporate governance terms – sliding doors moment.
By the spring of 2026, Mark Tucker, the former Prudential and AIA chief executive, will have served nine years at the helm of HSBC. The bank is wise to begin the search early. Ann Godbehere, its senior independent non-executive, will not have a deep pool of candidates to choose from.
HSBC’s chairmanship has traditionally been picked from the company’s executive ranks, with Tucker the sole exception to that convention in its 152-year history (at the time of his appointment).
Steeped in Asian financial services, he was, nevertheless, not seen as an obvious choice to replace Douglas Flint – so much so that when one reporter heard that ‘Tucker’ would be HSBC’s next chair, his assumption was that it was former Bank of England deputy governor Paul Tucker.
The new chairman’s first choice of CEO, John Flint, was fired just 18 months after he took over.
Noel Quinn, the next choice, had more success, steering HSBC – alongside Tucker – through the COVID pandemic and a protracted activism fight with the Chinese insurer Ping An which at one point threatened management’s grip on the business.
Quinn has now gone too, replaced by another long-serving executive Georges Elhedery, whose recent reorganisation of the bank has raised a series of questions about its long-term commitment to a number of its businesses (including the UK retail bank).
In his early exchanges with analysts, investors and the media, these questions have been dismissed. Logically, though, it feels right that Tucker’s successor should be appointed from outside HSBC’s current boardroom ranks if Elhedery’s strategy is to be properly held to account. The next five years – a period when HSBC could find itself caught in the crosswinds of a Donald Trump-fuelled trade war between the US and China – will not be easy to navigate.
Watchdog’s ‘name and shame’ climbdown is the least bad outcome
A u-turn. A climbdown. A caving-in. Those were some of the descriptions applied to the Financial Conduct Authority’s decision to soften its proposals to name and shame companies facing the sharp end of its enforcement machine.
After a fierce backlash from just about every stakeholder group imaginable, some moderation was inevitable. The watchdog’s initial plan – to give the targets of certain investigations just a day’s notice before publicly announcing them – was Draconian, unnecessary and at odds with the prevailing political winds driving the FCA and other economic regulators to keep a weather-eye on the UK’s economic competitiveness.
During the months between the proposals being circulated and last week’s revisions, there have been a string of mea culpas from the FCA’s leadership. Ashley Alder, the chairman, and Nikhil Rathi, chief executive, both told parliamentary committees that they had misjudged the extent of the reforms, as well as the way it communicated them.
The episode was indeed a misjudgement and would have done nothing to augment London’s attractiveness as a place for financial services businesses to invest, but the likely impact of the regulator’s blueprint was also exaggerated by those with a vested interest.
Listed companies already have an obligation to disclose regulatory investigations to their own shareholders – the sections of banks’ financial results which contained updates on such probes became a fertile hunting ground for journalists in the years after the 2008 banking crisis.
There is also an argument that the FCA would be doing investors a disservice if it failed to announce investigations which raise questions about the broader governance of public companies it oversees.
It may not have been the FCA’s finest hour. But modifying, rather than abandoning, its plan is the right outcome.
How long Mitie stay is the question for outsourcing chief Bentley
To say that Phil Bentley, the former British Gas boss, had merely steadied the ship at one of Britain’s biggest outsourcers since he took over in 2016 would be a shade uncharitable.
The company he inherited was a basket case. Mitie’s stock-in-trade – contract cleaning, prisoner escorting, defence facilities management – operates on wafer-thin margins; the dual demise of Carillion and Interserve during the last decade served as salutary reminders of the fragility of the sector’s operating models and balance sheets.
In that context, Bentley deserves credit for making Mitie significantly more robust, buying Interserve’s facilities management division to bulk itself up.
After a period of relative calm, though, investors should brace themselves for change at the top.
The company has already begun a search for a new chairman to succeed veteran Derek Mapp, with a handover likely in the middle of next year, raising questions about the timing of Bentley’s own succession. People close to Mitie now say he is unlikely to stay in the post much beyond 2025.
In the meantime, he has been busily reshuffling the company’s advisers, adding Goldman Sachs alongside Peel Hunt and Stifel as joint corporate brokers.
One shareholder who knows Bentley well say he has an eye firmly on his legacy. Will another big deal mark his last hurrah?