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Lack of public long-term commitment seen by some as

problematic

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HSBC ( HSBC ) insiders impressed by his performance on interim

basis

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Analysts expect search for successor to continue in

background

By Lawrence White

LONDON, Dec 3 - HSBC's ( HSBC ) appointment of Brendan

Nelson as chairman on a permanent basis raises questions about

the Asia-focused bank's succession planning and long-term

vision, corporate governance experts and analysts said on

Wednesday.

Nelson's elevation from interim chairman after HSBC ( HSBC ) spent

more than a year searching for external candidates is something

of a surprise given the 76-year-old's previous reluctance to

commit for the long haul in a role crucial to supervision of the

CEO and strong relationships with regulators and shareholders.

After approaching candidates ranging from ex-British finance

minister George Osborne to Goldman Sachs' Kevin Sneader, the

bank has gone for a former BP and NatWest board member who has

spent most of his career in the UK rather than Asia.

'MUDDLED APPOINTMENT PROCESS'

"The seemingly muddled appointment process raises serious

concerns about succession planning and, by extrapolation, the

coherent long-term vision for the company," said Bobby Reddy,

Professor of Corporate Law and Governance at the University of

Cambridge.

Nelson's main role will be to lead the board's supervision

of Georges Elhedery, who has completed a wide-ranging overhaul

of HSBC's ( HSBC ) management structure and strategy since being

appointed CEO in September 2024.

HSBC ( HSBC ) insiders say Nelson has impressed while acting as

interim chairman. He received the board's unanimous

approval after growing in enthusiasm for the role and indicating

late in the process that he was keen to take it on permanently,

said an HSBC ( HSBC ) source close to the matter.

HSBC ( HSBC ) did not respond immediately to a request for comment.

However, Elhedery's comments a day before Nelson's

appointment on Wednesday, suggesting the ex-KPMG partner was

reluctant to take the position for the full term, could

undermine the new chairman's authority, analysts said.

NELSON APPOINTED IN BRIDGING ROLE?

Andreas Kokkinis, a banking corporate governance expert at

Birmingham Law School, said Elhedery's lack of knowledge about

Nelson's appointment was good practice and showed "the choice

was really made by the independent directors as it should be".

Kokkinis also said Nelson's age suggested a short tenure was

likely. "This makes sense as a "bridging" chair," he told

Reuters.

By appointing Nelson, HSBC ( HSBC ) has relieved the immediate

pressure, but it has not stopped analysts speculating that the

bank will reprise the search.

"It feels to me like they've appointed him to try and take

away the ongoing speculation, but I suspect the recruitment

drive for a longer-term successor will continue in the

background," said Shore Capital analyst Gary Greenwood.

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