Chief executive officer, HSBC Holdings
Born: November 7, 1948, in England.
Education: Exeter College, Oxford, BA, 1966; MIT, MSc.
Family: Son of Dudley Keith Green and Dorothy Rosamund Mary Wickham; married Janian Joy, 1971; children: two.
Career: British Government, 1971–1977, Ministry of Overseas Development; McKinsey and Company, 1977–1982, management consultant; Hongkong and Shanghai Banking Corporation (became HSBC Holdings in 1993), 1982–1992, various positions; 1992–1998, group treasurer; 1995–1998, director of HSBC Bank (formerly Midland Bank); 1998–2003, executive director of Investment Banking and Markets; 1998–, executive director; 2003–, chairman of HSBC Investment Bank Holdings, department chairman of HSBC Bank, chief executive officer.
Publications: Serving God? Serving Mammon? Christians and the Financial Market, 1996.
Address: HSBC Holdings, 8 Canada Square, London, E14 5HQ, United Kingdom; http://www.hsbc.com.
■ In 2003 Stephen K. Green was appointed CEO of HSBC Holdings, Great Britain's second-largest bank and the second-largest international banking concern in terms of market capital. Founded as Hongkong and Shanghai Bank in 1865 by a Scotsman and other businessmen to focus on imperial trade in East Asia, the business grew and became HSBC Holdings in 1993, with subsidiaries throughout the world, including Asia and North and South America. After taking over the reins at HSBC, Green set out to organize and instill a sense of teamwork and continuity in the global banking concern. He also oversaw the acquisition and integration of the U.S. consumer-finance group Household International, which represented HSBC's largest acquisition in a series of acquisitions made in the five years prior to Green's appointment as CEO. Noted as studious and competitive, Green was also a part-time preacher in the Anglican Church.
Green grew up in Brighton, England, the son of churchgoing parents who influenced his later decision to become more involved with his Christian faith. He graduated with a degree in philosophy, politics, and economics from Exeter College, Oxford, and then earned a master of science degree from the Massachusetts Institute of Technology (MIT). He joined the British government's Ministry of Overseas Development in 1971 and worked there for six years before joining the international management-consulting firm of McKinsey and Company in 1977. In 1982 he joined HSBC's predecessor, the Hongkong and Shanghai Banking Corporation, on a two-year contract that he hoped would turn into a four-year contract. Green would later recall to Jill Treanor in an article in the Guardian , "It was not in my wildest imaginings that I would be in the company 21 years later or that the company would become what it has" (October 18, 2003).
Green joined HSBC to take on responsibility for corporate-planning activities. In 1985 he was put in charge of developing the bank's global treasury operations. In 1992 he became group treasurer of HSBC Holdings, with responsibility for the HSBC group's treasury and capital-markets businesses globally. He was made a director of HSBC Bank (formerly Midland Bank) in 1995.
In 1998 Green was appointed executive director of Investment Banking and Markets, responsible for HSBC's investment banking, private banking, and asset-management activities. He also assumed responsibility for HSBC's corporate-banking business in May 2002. While serving as executive director, Green showed how tough he could be when he cut out all executive bonuses in 2001 and 2002 after the stock markets had fallen for the second and third years in a row. Green explained his rationale to James R. Hagerty and Michael R. Sesit of the Wall Street Journal : "We took the view that a business that had not performed for the shareholder couldn't expect to receive bonuses" (March 3, 2003). As a result of the bonus cuts, some of the company's bankers and research analysts left in protest. Nevertheless, in addition to holding down costs, Green's decision to cut bonuses was good public relations for the company. HSBC's chairman, Sir John Bond, told Institutional Investor , "We had corporate clients come up to us and say, 'Thank God you've taken a stand'" (April 2003).
Some colleagues and industry analysts noted that it was Green's foresight and courage in halting bonuses that influenced the HSBC board's decision to appoint the 21-year company veteran to succeed the retiring HSBC chief executive in May 2003. Another factor in the decision was that the corporate, investment-banking, and markets divisions that Green had been heading accounted for $194 billion, or 36 percent, of the company's pretax profits in the first half of 2002.
Analysts also noted that HSBC had never made anyone from outside the company its CEO and that Green had spent 20 years being groomed in the HSBC corporate culture. As head of corporate and investment banking, Green showed that he adhered to the corporate philosophy by carefully watching costs and emphasizing teamwork. Industry analyst James Leal told Sean Farrell of the National Post , "This is a transition from one HSBC-lifer to another. Strategically, it will be more of the same—HSBC will continue to expand its global reach" (March 1, 2003).
Many banking insiders in England felt that Green was taking over one of the best banking jobs in Great Britain, noting that the position had sometimes led to knighthood. Analysts noted, however, that Green's appointment came at a crucial time, as HSBC embarked on an expansion in the United States following its takeover of Household International. One of Green's first priorities as CEO was to oversee the smooth transition of the U.S. consumer-finance group, which had been purchased for $15.5 billion to help HSBC make inroads into the U.S. consumer market. Green's initial success in integrating the company into HSBC was tied to HSBC's profits jumping 25 percent to $6.1 billion in the first half of 2003. Roughly 10 percent of the profit came from Household.
Green also looked to apply the expertise the company gained from acquiring Household to other markets where HSBC was exploring consumer-finance opportunities, including Mexico, Brazil, Southeast Asia, and France. Green said these markets were ripe for consumer lending despite the fact that in many of them lending traditionally was associated with corporate and commercial clients rather than the individual consumer. Green told Maisara Ismail of the Business Times , "There are opportunities to build up the consumer finance business, particularly in the younger market as people are beginning to get fully integrated in the mainstream modern economy" (November 13, 2003).
Green also encountered controversy during his early tenure as CEO. The Household transaction was surrounded by controversy concerning payouts to executives and a $484-million settlement due to accusations of predatory lending by U.S. regulators. Green also made enemies when he decided to move approximately four thousand call-center and processing jobs from the United Kingdom to India, China, and Malaysia. This represented the largest job migration of any British financial-services company and fostered a groundswell of controversy. The British finance union Unifi spoke out loudly against the decision, but Green maintained that it was an important move in his effort to manage the company's resources internationally in the most cost-effective manner. He told Treanor of the Guardian , "It's wrong to pretend you can protect the existing jobs and wrong to pretend there isn't going to be change. It can't be the right response to say that emerging markets have no right to jobs" (October 18, 2003).
Although Green felt that the bank did not need acquisitions to continue to grow, he also noted that emerging markets in Asia, Mexico, and elsewhere were important to HSBC's continued success, especially in terms of its consumer business. But Green did not forget Europe. For example, he oversaw the launching of a credit-card business in Poland because it was a growing economy that had joined the European Union.
Nevertheless, Green kept looking for new sources of development outside of Europe. He received kudos for his support in fostering HSBC's growth in its Islamic financial services in Asia. He fostered the development of a comprehensive range of products and services at HSBC's Islamic division, Amanah Finance. He also stressed that the services needed to be aggressively marketed through HSBC's global banking network. Ultimately, Green geared up the finance group both in terms of investment and management capability to pioneer products and structures that gave HSBC a leading position in the Islamic finance industry. In 2003 HSBC became the first international bank in the United Arab Emirates to provide Islamic personal-finance products when it launched Amanah Personal Finance, a cash-financing facility that complied with sharia, or Islamic law. In the same month, HSBC was the first "high street" (finance district) bank in the United Kingdom to launch Islamic personal finance services with its Amanah Home Finance and Amanah Current Account, both of which meet the requirements of sharia. Green also launched a British-based Islamic finance program and expanded the program to over 70 branches in the United Kingdom.
Green's push for expansion in Asia focused heavily on China. He believed that the bank had to take a long-term perspective in China, and he was quoted by Brian Kelleher in a Reuters news-service report as saying, "China is going to become more and more important on a global scale. I think you will see us constantly growing our business there" (August 11, 2004).
Green said that his number-one priority in management was meeting what he called the "people challenge," that is, preserving a strong sense of teamwork through a management and working group that was spread across the globe. Analysts noted that he emphasized instilling integrity and professionalism in all HSBC staff. He stressed a moral business code of always giving the customer a fair deal. "I can't think of another management challenge more important than that," he said. "If you get that right everything else will fall into place. If you don't, you will lose something very precious" ( Business Times , November 13, 2003). Green told Jill Treanor that he looked for certain characteristics in employees. He said the most important characteristic, regardless of the employee's faith, was a view of the importance of morality and integrity in business life. "I happen to believe it is the only basis of sustainable success over the long term," he said ( Guardian , October 18, 2003).
As CEO, Green was committed to recruiting globally, and not just for employees to work in their own countries. He once noted that the bank's expansion over two decades from a regional Southeast Asian bank with 30,000 employees to a global powerhouse with 215,000 workers required that he recruit from nearly 50 different countries. Green also had strong opinions about how his current employees and those hired in the future could succeed. As reported by David Ignatius, Green told a graduating class at St. Gallen's University in Switzerland that they would have to work hard and stay on their toes, reminding them of the old Chinese proverb: "Today's rooster is tomorrow's feather duster" ( Washington Post, May 27, 2003).
Green not only practiced what he preached, he also wrote about it in his book Serving God? Serving Mammon? Christians and the Financial Market , which was published in 1996. Green was an ordained, unpaid Anglican Church minister and often preached in the church near his London home. Colleagues noted that he sometimes composed his sermons while flying to HSBC's outposts around the world. In his book and his sermons he stressed that businesses like HSBC could demonstrate their moral standing by always acting responsibly toward employees, customers, and the local communities. Referring to how his Christian beliefs affected his management style, he told Institutional Investor , "There's a very clear focus on doing the right kind of business, on long-term relationships with clients, on honesty and transparency" (April 2003).
Although he had strong moral beliefs, colleagues also viewed Green as being extremely competitive. Nevertheless, he prided himself on being a team player. He had a reputation for flexibility in managing and understanding that management must adjust over the years. For example, he told Ismail of the Business Times that HSBC's management organized its resources by geography and by activity. However, any organization according to these criteria would not necessarily be valid for the long term.
As for his personal outlook toward his own career, Green often noted that money was not the most important aspect of the job to him. He said that many others in the HSBC organization had more lucrative salaries and bonuses than he did. Green also believed that a company's size was not the most important element to ensure future success. Catching up with competitors through acquisitions was never his main priority. Instead, he focused on earning the best returns for shareholders and contributing to the economies in areas where HSBC operated. He told Ismail, "Yes, we are among the top banks in the world, and we all want to maintain that position, but I think it will be quite a fundamental mistake for us to say our primary goal in life is to become the largest bank by market capital in the world" ( Business Times , November 13, 2003).
As the head of a bank that employed people around the world, Green also emphasized cultural sensitivity in the expanding global marketplace. He told Philippe Rosinski that he believed HSBC would be less profitable and life would be a lot duller if his French colleagues "lost their French-ness" or Brazilian colleagues did not maintain their "Brazilian-ness." He also noted, "We prize our diversity. That's all part of the richness and fun of working together, and it's what makes us so creative and responsive to our clients' needs" ( Management Centre Europe , May 2004).
In early 2004 Green announced that HSBC's performance had exceeded the company's expectations for 2003. Operating in 79 countries, HSBC benefited from a global economic recovery and rising employment in its key U.S. and Hong Kong markets. Nevertheless, an uncertain economic outlook connected with high oil prices and rising interest rates led to falling share prices overall for the company. By May 2004 the company's stock price had fallen 10 percent for the year, making it the second-worst performer of the 11 top banks in the United Kingdom. Although Green professed to have a somewhat cautious outlook, he was generally pleased with the company's progress under his guidance to that point. He initiated a new management plan to further the company's globalization.
In addition to his duties as CEO, Green held directorships at the Hongkong and Shanghai Banking Corporation, CCF, HSBC Guyerzeller Bank, HSBC Bank USA, HSBC Private Banking Holdings, and HSBC Trinkaus and Burkhardt. He was a member of the board of directors of Credit Commercial de France, director of the Poplar Housing and Regeneration Community Association, and chairman of International Needs UK.
See also entry on HSBC Holdings plc in International Directory of Company Histories .
"Britain's Biggest Bank Name Poetry-Loving Minister as Chief Executive," Knight Ridder/Tribune Business News , February 28, 2003.
Farrell, Sean, "HSBC Appoints New CEO To Shepherd US$15.5 B Acquisition: Stephen Green to Replace Sir Keith Whitson," National Post , March 1, 2003.
"The Greening of HSBC," Institutional Investor , international edition, April 2003, p. 9.
Hagerty, James R., and Michael R. Sesit, "Deals & Deal Makers: New HSBC Chief Will Minister U.S.-Loan Foray," Wall Street Journal , March 3, 2003.
Ignatius, David, "Innovation in the Face of Uncertainty," Washington Post , May 27, 2003.
Ismail, Maisara, "Preserving Teamwork a Vital Challenge for HSBC," Business Times , November 13, 2003.
Kelleher, Brian, "HSBC's Size Seen Less Important in China Expansion," Reuters news-service report, August 11, 2004, http://uktop100.reuters.com/latest/HSBC/top10/20030811-FINANCIAL-HONGKONG-HSBC-CORRECTED.asp .
Rosinski, Philippe, "Developing Global Leaders with Coaching Across Cultures," Management Centre Europe , May 2004, http://www.mce.be/knowledge/400/27 .
Treanor, Jill, "Preaching Profit: Interview Stephen Green, Chief Executive, HSBC," Guardian (England), October 18, 2003.
—Marie L. Thompson