FILE PHOTO: Two HSBC bank logos are displayed on an office building in Mexico City, Mexico, July 25, 2025. REUTERS/Henry Romero/File Photo

By Lawrence White

LONDON, Dec 3 - HSBC's 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 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 management structure and strategy since being appointed CEO in September 2024.

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 source close to the matter.

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 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.

($1 = 0.7495 pounds)

(Reporting by Lawrence WhiteEditing by Tommy Reggiori Wilkes and David Goodman)