As we continue to discuss the propriety of the same person being simultaneously the CEO and Chairperson of a company, the current happenings in HSBC Bank have upped the ante by raising the issue of corporate governance involved in the CEO becoming the Chairperson after ceasing to be the CEO. It s customary for HSBC's CEO to get elevated as Chairperson. This tradition is now attracting adverse notice of investors.
Michael Geoghegan, the present CEO is supposed to have threatened that he would resign from HSBC if he is not made the Chairperson. (Stephen Green is joining the UK government as Trade Minister making the Chair vacant.) The two posts require different kinds of expertise, but it is not impossible for the same person to excel in both positions. Governance aficionados argue that conflict of interests is inherent in a CEO taking the avatar of Chairperson immediately after demitting the CEO office.
HSBC's decision will be watched with 'interest'.
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