HSBC hires headhunters in search for new board members

HSBC is preparing to refresh its board of directors after a bruising few months in which some of its most senior members were criticised by parliamentary committees over a tax evasion scandal at its Swiss private bank.

Europe's biggest bank by assets, which earns most of its profit in Asia but is based in London, has engaged headhunters to find replacements for as many as five longstanding non-executive directors in the next couple of years.

The move comes after Stuart Gulliver, chief executive; Douglas Flint, chairman; and Rona Fairhead, former chair of its audit and risk committees, were quizzed by MPs over who was to blame for the tax evasion scandal at HSBC's Swiss private bank.

The bank's appointment of headhunters at MWM to look for new non-executives was first reported by Sky News, which said Mr Flint would step down by the bank's annual meeting in 2017.

One of the new non-executive recruits could subsequently be a candidate to replace Mr Flint, who is expected to step down in the next couple of years. But a person close to HSBC said it was not seeking to replace him as chairman.

The bank, which is expected to face questions over the tax evasion scandal at its AGM next week, has previously said that its next chairman will break with a tradition of coming from within the executive ranks.

"In discussions with leading shareholders consulted in the process through which Douglas Flint was appointed chairman in 2010, it was indicated that the board would ensure that there were eligible non-executive candidates in place for consideration ahead of the next succession," the bank said in a statement in March.

"It was acknowledged that shareholder expectation was for the next chairman to be non-executive," it said.

Mr Gulliver and Mr Flint have both apologised for the "conduct and compliance failures" at the bank's Swiss unit. Mr Flint was finance director for much of the time when the alleged wrongdoing took place and has been criticised for failing to spot it.

Ms Fairhead, head of the BBC Trust and former chief executive of the Financial Times Group, was accused of being either "incredibly naive or totally incompetent" by the public accounts committee for not doing more to spot and stamp out wrongdoing at HSBC's Swiss unit.

She is the longest-serving member of the HSBC board, which she joined in 2004, and is among those expected to be replaced in the next year. Sir Simon Robertson, deputy chairman, has been on the board since 2006, and the former Goldman Sachs executive and ex-Rolls-Royce chairman is also expected to be replaced by next year.

Others who have had long terms on the board and could be replaced in the next couple of years include Sam Laidlaw, the former chief executive of energy group Centrica; Safra Catz, chief executive of software group Oracle, and Rachel Lomax, a former deputy governor of the Bank of England.

HSBC, which celebrated the 150th anniversary of its creation in Asia this year, has been reeling since the publication in February of damaging details about alleged tax evasion by wealthy clients of its Swiss private bank.

The reports showed that some of HSBC's Swiss clients were offered services in 2005-2007 to help them avoid taxes. These included giving them large, untraceable "bricks" of cash in foreign currencies, and setting up offshore companies to hide undeclared wealth from authorities.

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