Morning Coffee: Caring, cerebral, banker dumped after long years of devotion. Students are desperate to work in banking
It’s not common to get the CEO job at one of the world’s biggest banks if you don’t really want it. But according to friends of John Flint, quoted in the WSJ obituary for his tenure at the top of HSBC, he really didn’t care for the profile or the power for its own sake. Flint just thought it was “his duty” to the organisation to step up when the bank needed him.
At almost any other bank, this would sound like a very strange and possibly self-serving thing to say, but given Mr Flint’s background, it’s highly believable. As a high-school student (unusually for HSBC in this period, he isn’t Scottish), he was attracted to HSBC because of its “international officer” program, the fast track of graduate entrants destined for senior posts all over the world. At the time (1989), this program involved living in a mess facility in Hong Kong called “Cloudlands” and HSBC had only recently scrapped the rule forbidding international officers under the age of 30 to get married without the chairman’s permission. The idea resembled an old fashioned military college or civil service and was meant to breed utterly dedicated long term employees and culture carriers.
This is what Flint was, by all accounts; a cerebral figure who drew up lists of options on pieces of paper and sat in meetings listening to others without expressing his own view. His signature initiatives were to launch an even more aggressive investment programme in China, and an attempt to create a more “humane” working culture, with more downtime and space for family life.
Unfortunately, he didn't last. Eighteen months after taking the top job at the bank he'd devoted his life to, Flint is gone, by “mutual agreement” after a board meeting on Sunday, with not much explanation except that “a change was needed.” Although Mr Flint was “the best decision” at the time, “the environment we’re going into needs a new person”, according to chairman Mark Tucker.
What went wrong? It’s possible that, since the environment HSBC is going into is one that might involve thousands of redundancies, the board felt that his employee-friendly face wasn’t suited to taking hard decisions on cutting things. But it’s also potentially the case that he just had too much of the corporate DNA in his genome.
For the first half of Mr Flint’s career at HSBC, “chief executive officer” wasn’t really a big thing. He joined under Sir Willy Purves, who was succeeded by John Bond, both of whom were executive chairmen and larger than life characters. They didn’t always reject the title “taipan” if others used it, and tended to be supported by corporate officers very much in the bureaucratic mould. Mr Flint’s predecessor and mentor, Stuart Gulliver, managed to grow into the role, but HSBC International Officers weren’t necessarily encouraged to become charismatic leaders; they were meant to be self-sacrificing, bank-first administrators exactly like John Flint. It’s a slightly sad thing to consider – but quite possibly true for all that – that the board seems to have decided that being a smart guy with the bank and its people’s interests at heart isn’t quite enough. - You need to be able to bang the drum a bit and make a show of decisive action too.
Separately, and at the other end of the career life cycle, 500,000 applications were made to investment bank graduate roles this year, with young people attracted by the salaries, perks and ability to get married without asking the chairman. Every bank except Deutsche seems to have seen an increase in applications, with Goldman Sachs getting 270,000 (for its graduate and internship programs combined) versus 220,000 last year and JP Morgan seeing a 55% increase.
There are some dark mumblings that quality has been sacrificed for quantity and that the true cream of the graduate class are applying to Facebook and Google these days. On the other hand, it’s quite possible that exactly what the banking industry needs is fewer self-identified elites chasing their dreams of personal fulfilment. In any case, it’s notorious in the stock market that one of the most reliable contrary indicators for the long term trend is “percentage of Harvard University graduating class going into finance jobs”, so maybe we are at a turning point.
Of course, the combination of growth in the number of applications with stagnant or declining industry headcount means that the chances of actually getting a job in investment banking aren’t great. According to rumours, as little as 20% of the current JP Morgan summer associate class are getting an offer. (Dealbreaker)
Facebook, for their part, have been getting a little taste of how the banking industry feels, as apparently at least ten start-ups rejected their proposals for co-operation on the Libra cryptocurrency project (Financial News)
The company denies it, but there are rumours of job applicants being cut off late in the interview process due to an “informal freeze” in hires for VP level and above at Credit Suisse. (Business Insider)
Apparently the only major industry where people swear more than finance is the healthcare industry. It’s also suggested that using bad language makes you appear more honest (FT)
Shareholders at Deutsche Bank are demanding cuts to senior executive pay, noting that Deutsche has historically paid closer to US peers than to, for example, BNP Paribas, and that this might not be acceptable in the new strategic environment (Financial News)
Anti-money laundering continues to be one of the big growth industries in employment terms, as banks are still nervous about delegating responsibility for checking out suspicious transactions to all the machine learning and big data systems which are widely marketed as solutions to the problem (Bloomberg)
Goldman Sachs is an investor in Infinibond, a company that begun as a Black Mirror-style attempt to create ongoing social media presences for the recently dead, pivoted to psychological profiling and the creation of intelligent avatars, and which seems to generate a lot of lawsuits. A very strange story (Sifted.eu)
The “massive premeditated raid” which saw the departure of Mark Connelly and other investment banking staff to Jefferies was one of the biggest personnel stories of 2009, not least because of the lawsuit it occasioned (long since amicably settled). Mr Connelly is allegedly now interviewing to return to UBS in a senior ECM role. It’s described as “unusual” for someone to do this, although realistically ten years is a very long time in top management turnover terms for anyone to bear a grudge. (Bloomberg)
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