HSBC to magically make a lot of new managing directors
HSBC is dismantling its senior management structure in an attempt to bring it into line with peers and reduce its top-heavy hierarchy. It also appears to be making it much easier to become a managing director in the process.
HSBC currently has four management bands below Group CEO Noel Quinn: Group managing director, Group General Manager, GCB1 and GCB2, where 'GCB' stands for 'Global Career Band.'
These have been deemed too unwieldy and HSBC has therefore whittled them down to three, namely: group executive, general manager and managing director. Below this, it will keep its existing bands that range from GCB3 to 8, where employees designated 8 are the most junior.
As part of the changes, all HSBC's employees in GCB2 will automatically be renamed managing director in March 2022. However, other people might get to be called managing directors too: in a memo to staff seen by eFinancialCareers, the group head of HR Elaine Arden said today that managing director roles will cover a broad range of responsibilities across management layers three to five.
HSBC had a few MDs already, but the implication is that there could be a lot more of them under the new arrangement and that they could have widely varying responsibilities.
HSBC said the only changes will be to titles. “Your contract will remain the same, and there will be no negative impact on existing pay or benefits,” Arden said.
She added that “total compensation will continue to be determined by the market rate for that role, internal relativity and standard considerations.”
The new General Manager band, which will sit below the Group Executive Committee, covers roles that are responsible for leading the group’s most significant businesses, regions and playing a longer-term role in forming strategy. The bank said that pay will not change for general managers either, and that it will publish the roles (and presumably their occupants) later this month. They will take effect in September 2021.
The aim of the changes is to create “a leaner and more focused, agile and competitive bank” said Arden. They follow a review which concluded that HSBC has more “leadership bands than most comparable peers and that this contributes to a more hierarchical culture”.
While the new designations might seem like an attempt to bring HSBC into line with the systems of nomenclature at rival banks, there are suggestions that they could also provide an opportunity for HSBC to downgrade some existing long-serving staff (of which there are many), particularly if a lot of GCB5s are included in the new MD group.
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