IO with a view
He opened the door to see a room full of swivel chairs,
arranged haphazardly no people. He had deliberately
arrived early for the Saturday morning assembly of 40 or so
senior managers his first experience of the bank's
The senior executive, new to the ways of the HongkongBank,
went to check some other rooms. Maybe, he thought, embarrassed,
he had picked the wrong floor. Eventually he got back to his
starting point and found a crowd of suits outside the meeting
room, drinking coffee. As the newcomer lifted a cup, John
Strickland, the bank's chairman, put his own down. At this
signal, without a murmur, everyone else did the same and
followed Strickland into the room full of chairs.
It was 8.45 exactly. Strickland sat in the centre, the rest
went to what appeared to be random chairs. Without further ado
Strickland swivelled round and addressed by his first name the
man who caught his eye, asking him what was going on in
Malaysia. A few minutes later Strickland swivelled 45 degrees
and fired out another request for information.
After a few of these meetings, the senior executive realized
that nobody sat in the same chair twice apart from
Strickland, that was. Positioning was indeed purely random. And
all the men knew each other. Most were from a bunch called
international officers. Many had actually lived together in an
officers' mess in Hong Kong called Cloudlands.
"I might get a call from the head of Indonesia," says Andrew
Dixon, HongkongBank's general manager for Asia (excluding Hong
Kong and China). "He needs $20 million right away. I've known
him for 30 years. I trust him. I know his strengths and
weaknesses. So I can give an approval over the phone."
Welcome to the financial world's most idiosyncratic and
powerful network: that of the international officer
in common parlance the IO. Until
1989 it excluded women. And until about the same date young
recruits to it couldn't marry without the chairman's permission
a period between the ages of 22 and 30 referred to
in bygone days as being "on ice". IOs' service was
traditionally measured from when they "went east" and
disembarked in Asia, not when they first joined the bank in
London. IOs there are currently 367 of them among
the group's 17,000 executives are mostly white
British males who share the same values. Brevity and
cost-consciousness figure highly.
This is evident at board meetings. When one finishes, its
duration is measured and its cost calculated on the basis of
the salaries of those present and other overheads. The figure
is read out and put in the minutes. A meeting held last month
cost HK$30,000 ($3,876).
Three business heads are asked to make presentations to the
board. Strickland gets them in his office beforehand, lists the
types of information he and the board members want, and gets
out a stopwatch. The unit head has exactly 10 minutes, and is
told to proceed on a dry run of what he intends to say. "It
actually makes people realize time is precious," says Sir
William Purves, the no-nonsense Scottish taipan of HSBC
Holdings, the world's most profitable financial institution,
the core of which is the Hongkong and Shanghai Banking
Corporation HongkongBank for short.
To-the-point memo-writing is emphasized. Some outsiders find
this hard to adapt to, others like Philip Gray, do not. The
incoming executive chairman of James Capel, a part of the HSBC
Group, wrote a memo which consisted of three lines: "In the
interests of brevity, I agree with the memo dated x by y. I
disagreed with point z on memo dated w..." A couple of hours
later he received a telephone call from the HongkongBank chief
executive, David Eldon, congratulating him on an excellent
piece of memo-writing.
The IO culture of cost control, concision and mutual
confidence has plainly worked. In the first half of 1996, HSBC
Holdings made pre-tax profits of $3.5 billion, with a return on
equity roughly comparable to Citibank's, but using only half
the balance sheet leverage of the US bank. In the full year
HSBC may break through the $6 billion mark, a first for any
financial institution. But there are severe challenges ahead.
It's not for nothing that Andrew Dixon expects some fundamental
organizational changes. "We will have the luxury of the mess
culture for [only another] 10 years," he muses, looking forward
In Hong Kong, which contributes 40% of group profits despite
having only 6 million inhabitants, there is the handover to
China this year to come to terms with. This involves the bank
jettisoning the colonial past and bringing more Chinese into
senior management. Then there is the need to expand business in
Asia, learning from and seriously challenging Citibank's
success. Perhaps most important is the assimilation of the
values and organizational structures of HongkongBank into HSBC
as a whole, a process that carries heavy risks.
Mandarins and matrices
HongkongBank still has to make its mind up about how much
more like Citibank it wants to be. A recent move to functional
reporting and matrix-style management is a step in that
direction, overturning for the first time in the bank's history
a system in which individual country heads members of the
IO elite ran their turf with little or no interference
from head office.
Senior figures in the bank don't like to use terms like
matrix, less still admit that the bank's devotion to the
all-powerful man on the spot is in any way being challenged.
Michael Broadbent, HongkongBank's head of public affairs, says:
"We're developing more of a matrix-style management but the
country CEO still has primacy. If he's not happy about
something, it won't happen. Why? Because it has held us in good
The process is most advanced in the HongkongBank treasury,
headed by Stuart Gulliver. Gulliver, of course an IO himself,
knows full well the concerns of IOs on the ground. The central
issue so far as he is concerned is who owns the local
treasuries. His answer is frank: "I have a joint responsibility
with the chief executive it's not a dotted line or some
touchy-feely bullshit. We jointly own it."
"This policy," he continues, has been laid down by Bond
[HSBC Holdings' chief executive] and Eldon [HongkongBank chief
executive]. Technology and the world is changing. The country
as an isolated concept is being threatened."
Many banking analysts agree. They also wonder whether the
IO's traditional mobility is an outmoded approach. Typically an
IO, whether at junior or senior level, will transfer
internationally after three years. This practice, as well as
producing regional generalists, was reckoned to be a force
against fraud. Today this is less of a concern than the
fracturing of local relationships that occurs when a new man is
moved in and the old man is posted elsewhere.
Purposeful mobility has been the making of the group so far.
Founded in 1865 on "sound Scottish banking principles",
HongkongBank financed the growth of Hong Kong before spreading
across Asia. It has since assembled a network of banks
elsewhere. By the time it acquired UK retail bank Midland Bank
in 1992 and adopted a London-based holding company structure,
HSBC Holdings had become a global institution with 105,000
employees and operations in 72 countries.
HongkongBank may be just one part of a complex federation,
but it remains culturally dominant. HSBC Holdings' headquarters
is in a former Midland Bank building in London, but its heart
remains on Queen's Road, Hong Kong, where two bronze lions,
Stitt and Stephen, imperiously guard the bank's values.
The upper layer of management has been at "the bank" almost
as long as Stitt and Stephen. Group chairman Purves joined in
1955, group chief executive John Bond went east in 1964 and
HongkongBank chief executive Eldon and his senior managers all
joined in the 1960s.
Central to the bank's strategy are the IOs, the inner core
of managers. Their turnover rate is extremely low
5% year on year, half of which is accounted for by retirement,
which is offered at the age of 53. "It is not a terribly poetic
phrase," says Chris Langley, HongkongBank's head of Hong Kong
and China, who came east in 1966, "but the IOs are the
HongkongBank's glue." When the group doubled its head count in
1992 by acquiring Midland it was two years before it was
recognized that an IO needed to be put in charge. Keith
Whitson, who came east in 1965, was made chief executive. The
chief operating officer of Marine Midland in the US is also an
IO, as is the deputy chairman (who acts as chief executive) of
the British Bank of the Middle East.
The HongkongBank ideal
What makes an ideal HongkongBanker? Purves, known internally
as Willie, has all the traits say insiders. He is a
HongkongBank man through and through he always wears a
tie embossed with the bank's emblem, based on a St Andrew's
cross. The 65-year-old Kelso-born Scotsman is remarkable for
his attention to detail and the way he bypasses bureaucracy. He
answers his own phone. He sends back memos with the English
corrected. And if you're boring him unforgivably with waffle
and jargon, he's likely to interrupt you and say: "Where's the
real meat here?"
Purves started his working life as a tea boy at the Royal
Bank of Scotland, before winning the DSO for courage under fire
in the Korean War, the first British national serviceman to
wear the medal. Starting his career at HongkongBank in Hamburg,
he managed six branches before becoming chairman Sir Michael
Sandberg's heir apparent in 1986, succeeding him in 1987. The
Sandberg years were perhaps marked by uncharacteristic excess
but Purves took the bank back to its Scottish roots. As the
adage goes, that means short arms and deep pockets and
Straightaway he swapped the bank's Rolls-Royce for a Jaguar
and sold off Sandberg's residence, aptly named Sky High. A
lavish mansion at the top of Hong Kong's Peak, with no dining
room because Sandberg disliked entertaining at home, it
recently changed hands for £30 million ($48 million).
"Sir William treats himself so modestly," says Vincent
Cheng, the only Hong Kong Chinese staff member on
HongkongBank's board. "Look at what he gets compared to heads
of US corporates. He is a fine example of how a HongkongBank
executive should behave."
Purves, in spite of the group's huge profits, fails to make
its top-20 earners' list a fate reserved for the
investment bankers. He even took a pay cut to around
£600,000, when he moved from Hong Kong to London. His
approach to pay is described by one senior executive as
Costs are treated with similar rigour and as with everything
about Purves this permeates the organization. "He came to a
lunch hosted by the Hong Kong Monetary Authority," recalls one
executive. "We were talking about Eurotunnel and he said that
he had used it and that first class was excellent because the
wine and even champagne were included in the price. Someone
said that's good, how much is it? Willie said he didn't know,
which surprised everyone, because it didn't sound like him."
Purves then admitted to having bought an economy ticket
the price of which he certainly knew having got his wife
to upgrade it by way of a coupon offer in the Financial
"Oh my God," the bank executive recalls thinking, "this will
become standard. Use coupons whenever you can! This is an
indication of how he spends the bank's money." Another time
Purves is said to have given HK$10 to HongkongBank's chief
financial officer, Simon Penney, to photocopy a recipe for Lady
Purves. Perhaps it was an object lesson for Penney, recently
seconded from Midland, in what cost control really meant at
Only one, perhaps apocryphal, story is told of a young IO
besting Willie. After noticing a young recruit had nipped out
for a while Purves asked him where he'd been. "To the barber,
sir." "What, in office hours?" said Purves. "But my hair grows
in office hours, sir," the young man replied. "Some of it
does," says Purves. "I didn't have it all cut, sir."
Is the next generation of international officers being
crafted in Purves's image? "A HongkongBanker has definitely got
to be a team player," says Eldon, another Scot. "It is also
essential to be an ambassador."
He does not mean this literally, though many of his
colleagues have OBEs (Orders of the British Empire) such as
Dixon, Langley, and most recently the CEO of Taiwan. Langley
has also been honoured in Malaysia, and is the only foreign
banker to have been awarded a dato-ship (a chieftaincy title),
which he received in 1995 on the birthday of the sultan of
Go east, young man
In the old days, the bank's London messenger would routinely
answer the enquiry from passers-by: "Are you a bank?" with the
dignified reply: "No, sir. This is an institution for learning
young gentlemen to become bank clerks." In those days the young
gentlemen were trained for 15 years, and after this
apprenticeship became "adults" a term still used today,
though young trainees are now called "jodpurs" (an acronym
derived from junior officer development programme) and the
apprenticeship takes only five years.
The system used to prescribe that service started the day an
IO stepped off the P&O steamer in Hong Kong or at his first
eastern posting. At this point the IO would be entered in the
"blue book", a large tome listing officers' seniority.
Even in the 1980s the blue book was still talked of. One
senior IO was said to have been particularly miffed when a
colleague, six months his junior according to the blue book,
was promoted first.
There are many IO cultural traditions. For example, a
clean-desk policy means staff are discouraged from leaving the
office while there's still paperwork on the desk. Traditionally
loans are approved in 24 hours. The staff manual still refers
to annual "leave" and there are still those who talk in terms
of a "tour" the traditional posting being three years. It
used to be the case that memos were addressed "My dear Bloggs"
and signed off, "Yours very truly" but only a very
limited number cling to this practice.
When an IO signs up, he does so in the knowledge that he may
never work in his home country traditionally the UK. A
powerful network is created, and IOs have tended to get
promoted more quickly than non-IOs. Their personal tax is paid
by the bank, a process that levels tax regimes and prevents
certain postings from appearing more lucrative than others. And
hardly anyone leaves.
An IO can be asked to go anywhere at any time even
relocate overnight. Incoming Canadian head of group human
resources Steve Tait recalls his first morning in the job. "I
had to place someone in Azerbaijan. I said, 'How in the world
do you get someone to move to Azerbaijan?' I was told you just
pick up the phone and tell them they're going."
Tait pulls a typical IO off the computer. Born in 1957, Mr X
joined the bank in 1977. After training in Hong Kong he went to
the United Arab Emirates in cash remittances, then did bills in
Yemen, returned to Hong Kong in an import-export role, entered
the group head office, had a brief attachment in New York, went
back to Hong Kong as a credit manager, was made a branch
manager in Indonesia, returned to Hong Kong to do asset
recovery and is still in Hong Kong in shipping finance. Tait
describes him as "tracking well in his career".
Arrow of destiny
The title head of human resources is a relatively recent
innovation. There used to be a staff manager, and the joke in
Hong Kong was that he decided an IO's next posting by the throw
of a dart. Nowadays, an eight-year-old automatic planning
database matches jobs and individuals a little more
methodically. When there's a vacancy, three or four IOs will be
selected by the system, which seems to boast a sense of humour.
The recent promotion of Peter Kirrage as deputy managing
director of Saudi British Bank in Riyadh was greeted among
fellow IOs in Hong Kong with wry grins. Kirrage was reckoned to
be HongkongBank's resident wine expert.
An IO called the international resourcing manager (IRM)
operates the database and reports to Tait. Because of the
wealth of personal information this IO has access to, it is a
powerful position. The IRM, who serves the standard three
years, is selected in consultation with Purves himself.
In past times the young gentlemen of the HongkongBank were
housed in the romantically named Cloudlands, an IOs' "mess".
There the bank's future leaders would get to know each other's
strengths and weaknesses, and lifelong friendships were born.
As were military-style japes one former Cloudlander
remembers how an IO's car was spirited into the building and
left under the stairs in the middle of the night, ready for its
owner to find it the next morning.
"It was rather like a military mess," says Dixon. "The
environment aimed to create an esprit de corps. It was a
process. You could be sitting down at a meal with a bachelor of
eight years' service. It was a predetermined policy for giving
advice, and ensuring information flow."
That sort of environment bred resourceful characters. The
present head of human resources at HongkongBank is David
Hodgkinson, who as manager in the Philippines dealt with a
year-long strike in Manila in 1993. What started out with
rather light-hearted non-cooperation tellers wearing
Citibank T-shirts, for example eventually turned nasty
when local staff blockaded the bank two days before Christmas
and refused to allow food in. At 6.30pm on Christmas Eve,
Hodgkinson chartered a helicopter and airlifted himself and the
captive managers off the roof. "This sent a strong signal that
we were in control of our destiny," he says.
In those days, when Cloudlands was a powerful tool for
building the next generation of leaders, it was common for each
IO to have a mess-boy. On one occasion a young IO was sure his
mess-boy was pinching his sherry. Colleagues asked how he knew,
and he replied that he had marked the level on the bottle and
it continued to go down, even after he refilled it with urine.
Just prior to leaving Cloudlands, he gave the boy a dressing
down and said he knew he'd been pinching his sherry.
"I marked the bottle, and I know you've been taking it." The
boy denied the accusation, and finally explained: "The only
time I take your sherry, sir, is when I want to flavour your
Today Cloudlands is a building site. A residential complex
is being constructed in its stead that will house senior bank
employees. It will incorporate a large number of family flats,
seven town houses, two four-bedroom houses and a 25-metre
swimming pool. And the training of the bank's young cadre of
IOs has moved from the lush heights of Hong Kong to a sometimes
chilly English manor house in St Albans called Bricket
HongkongBank IOs are no longer trained separately, being
mixed in with resident officers or ROs. An RO can come from any
part of the disparate HSBC Group. Last year the nine-week
executive training course included two Armenians. The emphasis
is on group values. The Bricket Wood residential blocks are
called Griffin (after Midland's logo) and Wayfoong
HongkongBank's Chinese name, which means "abundance of
remittances" or "the focus of wealth".
"There was a group that started on January 1," says Ray
Campsie, head of group training. "The first thing I said to
them was when was the last time they had expected to live,
laugh, drink, study and work with people from nine countries."
The HSBC Group may be cost-conscious but it views training as
an investment. Each trainee's nine week course costs about
Fewer men, less rugger
The man directly in charge of training the executives, Tony
Turner, is an IO. Unusually, he was given the option of turning
down this three-year posting. Campsie had no intention of
bringing an IO "kicking and screaming from the field" to a job
charged with turning 250 trainees a year into the group's glue
Turner was one of Cloudlands' last occupants. He recalls its
last mess Christmas party in 1983. Senior bank executives were
there, and the 20 or so occupants gave the old building its
last rites in fitting fashion. They hired 30 Gurkhas from the
Hong Kong defence force to play the bagpipes.
The macho IO culture is undergoing a change on all fronts.
The bank's leaders of tomorrow are less likely to be so
British, so male last year half the recruits were women
or so keen on rugby football.
Generally young men who liked rugby, and came straight out
of good schools or the army, were in with a good chance. Up
until the early '80s the 1980s it was even a source
of pride that none of the senior management had been to
university. Which is not to say that senior managers have not
made up for it since. Dixon was later sent by the bank to
Harvard Business School, while Eldon and Langley were
subsequently sent to the MIT's Sloan School.
HongkongBank still has a rugby team; and there's still an
annual grudge match against Swires, the British hong (trading
house). The bank usually loses. The bank will end its long
association with the Hongkong Sevens rugby tournament in 1998.
More heavily promoted is Trailwalker, a 100-mile trek across
Hong Kong's New Territories. Last year the bank entered 24
The present cadre of IOs is drawn approximately 50/50
directly from British universities and from within the
105,000-strong HSBC Group. The latter recruitment path involves
executives of operating companies being asked if they have
anyone of IO calibre they wish to put forward. Between 12 and
15 IOs are recruited each year, using such modern methods as
psychometric tests. The aim is to find those who display
traditional IO virtues: leadership foremost, closely followed
by "emotional stability" and "a hard-headed concern for the
Apart from a fair share of places for women, an effort has
been made to "internationalize" the IO cadre. Of the current
367 IOs, 54 are non-British. Change is not set to be dramatic.
In the past five years 40 of the 61 recruits were British. New
IOs include two Malaysians, five Indians, five Canadians and
one Hong Kong Chinese as well as seven other nationalities.
"The bank is looking to groom talent from around the globe
to head up local franchises," says David Koh, a 30-year-old
Malaysian IO based in Hong Kong. So far, though, unlike
Citibank, which has a profusion of Asians running Asia
Thailand by a Pakistani, Malaysia by an Indian
HongkongBank's 17 Asian country heads are distinctly
Koh is a former RO who was trained at Bricket Wood. "I got
lucky there was an opportunity to become an IO," he says.
US-educated, he works in a department with six other IOs, all
British, and is due to get a new posting in June. All he knows
is that it won't be in Hong Kong. "I won't say my wife's
looking forward to it," he says, "but she accepts it."
Koh, wearing a worsted silk tie and cloud-and-moon
cufflinks, represents the next generation of IO. "As an IO you
are more aware of the group as a whole," he says. "You know
what sorts of jobs are out there, at what grades what
jobs are coming up and when." He pulls out a printed list list
of all the IOs with their location and telephone numbers. It is
regularly updated and includes details of new recruits and
those about to retire.
Those still to join the list were enduring snowy weather in
Bricket Wood when Euromoney visited but Turner's 15
trainees, mostly Asians, were still outdoors on group-building
exercises. Out in the snow, the group was split in two. One was
trying to ford a ditch with only a plank and a rope swing, the
other was trying to get over what was supposed to be an
electric fence with the aid of an oil can. Turner rubbed his
frozen hands together and spoke in guttural Arabic to the only
Saudi in the group: "I bet he's feeling the cold."
Will the networks woven during nine weeks together at
Bricket Wood last the test of time like the friendships made at
The IO network gives HongkongBank short lines of
communication, and a culture built around powerful individuals
there are no credit committees. Perhaps uniquely the
network has all the associated benefits of a small bureaucracy
within a big group. Dixon concedes that it will be a great loss
if his successors can't give approvals for large sums down the
phone as he can, thanks to the Cloudlands mess culture he and
his colleagues were brought up on. He says the "proof will be
in the pudding" whether the new training methods keep the lines
of communication so short.
Being an IO remains a source of great pride. HongkongBank
treasurer Gulliver is an unusual example. He was recruited in
1980, but for 14 of his 16 years' service he has specialized in
the treasury area. Normally an IO is trained as a general
banker and actively prevented from specializing, but the bank
wanted someone of the corporate management cadre in the capital
markets division. It's perhaps a sign of the system's ability
to unselfconsciously adapt to change.
"I'm an IO," says Gulliver, "not an RO." Is it important
being an IO? "It's not something I would surrender lightly" is
Gulliver's revealing answer. (That's not to say that subtle
gradations aren't chewed over in jest. Head of group training
Campsie remembers that when he was made an IO, one of the IOs
working at Bricket Wood said Campsie was really a QIO, or
quasi-IO, whereas he was an RIO, or real IO.)
Gulliver is at the vanguard of change, and reckons that
being an IO has helped him, for example, in getting the
corporate bank to set up a capital markets division and bring
capital markets business to HSBC Markets. "We trained up those
account officers, and they are now salespeople for the dealing
room," he says.
Gulliver's perspective on being an IO can be put tersely.
There is, he says, "very low bullshit, very little politics."
There is also the loyalty thing.
The challenge is to maintain all that is good about the IO
culture in a new environment. Its defining quality, mobility,
is still unquestioned. But the HSBC group's human resources
department in London is wondering, for example, how the culture
will deal with maternity leave, an issue it knows it will have
to face up to as the average age of its female IOs reaches the
New-style managers are also being drafted into HongkongBank
in an effort to go toe-to-toe with Citibank. Eric Tai, the
newly created head of personal banking development, has been
with the bank for only three and a half years. His task is to
expand the personal banking franchise in Asia, to meet a target
of raising 30% of the HSBC group's revenue from non-Hong Kong
Asia by 2000 it's 17% at the moment. A former Citibank,
Chase and ANZ employee, he says with a smile that he will be
with the bank "for the immediate future". He was hired for his
marketing skills the bank recognizes this is an area
where its management culture sorely trails Citibank's. "The
target over the next five years is to increase our business in
the hundreds of per cent," says Tai, who has an inflatable
banker in the corner of his room which he puts in his chair
whenever he's travelling.
Wu's seal of approval
Of course HongkongBank already has satisfied and highly
influential customers. With string music coming from two large
speakers at the back of his office, Gordon Wu, Hong Kong
entrepreneur and head of infrastructure conglomerate Hopewell
Holdings is glowing in his praises. "HongkongBank bends over
backwards to try and stay with you," he says. "The people
change every two or three years but the corporate culture stays
the same." Wu has had 36 years' experience with the bank
"and no-one knows the bank better than me."
Wu's company, Hopewell, which derived its name from "let's
hope everything goes well", raised its initial HK$15 million
capital from Hongkong Bank in 1969. The loan officer was
Things didn't always go well, Wu recalls: "In 1973 the stock
market crashed. My borrowing from the bank was bigger than the
share value of the shares I had pledged. I did a summary of my
personal situation and went to see the chief accountant, a very
nice gentleman called John Boyer. He said: 'Look you've got a
fine company, the fundamentals are there, we'll stick with
you.' I remember walking to the door with him. He smiled at me
and said 'We don't have any alternative anyway.'"
When HongkongBank moved its domicile to London after the
Midland acquisition, Wu was one of those who explained to the
Beijing authorities that the move was not designed to make
China lose face. As one of the original 44 Hong Kong advisers
to Beijing, Wu went to see an ex-governor of the People's Bank
of China, then working at the Hong Kong and Macau affairs
office. "I don't know much about politics," Wu told him, "but I
know one thing. The bank's move to London should not be
He explained how the Bank for International Settlements
would categorize Hong Kong as a third-world country, and how
this would affect the bank's debt-raising capability. "The bank
has provided more expertise and capital for China than any
other foreign bank," Wu continued. "This move is to try and
make the bank more useful to you."
The HongkongBank is keen to get past 1997 without putting an
ex-colonial foot wrong. The bank's 21st century exo-skeleton on
Queen's Road hardly symbolizes an institution clinging to its
colonial past. It does, however, hang on to the best of the
cost-saving mentality: built-in cranes can undertake repairs
without calling on outside plant, and water to flush the
toilets is pumped from the harbour through a private
New order of Chinese
"Chinesification" has been under way for several years
inside the bank's HQ. But early efforts did not go well. In the
mid-1980s Lydia Koo was made manager of Mongkok branch, the
second most important in Hong Kong. But she left the bank after
less than a year in the job.
More recently there has been a spate of promotions among
promising Hong Kong Chinese. EC Lau is head of personal
banking. RC Or is head of corporate and institutional banking.
The chief executive for China is Eddie Wang. The head of
Shanghai is Jethro Lau. Vincent Cheng, a former chief economist
and one of China's Hong Kong affairs advisers, is the first
Hong Kong Chinese executive director.
He recalls his reaction when former HongkongBank chairman
John Gray told him in November 1995 he was putting his name
forward to join the board. "I was pleasantly surprised. In
fact, I was a bit shocked. I said: 'Hang on, have you thought
this through. Are you sure?'"
It was not just modesty. The composition of the
HongkongBank's board says a lot about Hong Kong. The colony's
biggest names have traditionally been on the board. The new
chief executive of Hong Kong, CH Tung, was a member until his
election, whereupon he resigned. And the British hongs were
always represented. However, the so-called noble house, Jardine
Matheson which has so successfully antagonized China in
the last few years recently resigned its seat.
"We don't promote people based on their ethnicity," says
Cheng, a fluent Mandarin speaker in Cantonese-speaking Hong
Kong. "That would be a wrong policy. We are an international
institution with shareholders from many countries. If you
promote a Chinese because he is Chinese what will the Brits
Cheng, who is widely tipped to be HongkongBank's next chief
executive, is not an international officer. "As a local officer
I have the right not to go somewhere if the bank asks. But I
probably would. I think we owe the bank our loyalty and are
obliged to do the job where it is needed."
But, he adds dryly: "I suppose you are not willing to die
for the bank. That is too much to ask."