What's the best view in London? From Parliament Hill, across the City? Up Ludgate Hill towards St Pauls? From the Oxo Tower at night, with everything lit up? On top of Richmond Hill with pastoral Petersham Meadows at the bottom?
All these, and others, are strong candidates. But they're public. One that truly takes the breath away is very private. It's facing west from the window of Stephen Green's office on the 41st floor of the HSBC headquarters building at Canary Wharf. The eye absorbs the canyons of the vast Canary Wharf complex far below, before heading towards the landmarks of the City and West End. Linking them is the glistening, bent finger of the Thames. It's as if the river has been positioned just so, beneath Green's eyrie.
The reason it's so spectacular is that it's so un-London – more New York, Tokyo or even Blade Runner sci-fi than familiar old Smoke. Standing here, you wonder what our forebears, who lived when the smog-bound mass really did earn its nickname, would have thought.
The sensation is of being in another place, on a higher plane. It's appropriate. Lord Browne of BP has his space overlooking St James's Square, in the heart of the British Establishment; Sir Terry Leahy runs the Tesco machine from suburban Hertfordshire, close to his people; Steph- en Green oversees the second-biggest bank in the world from a room that looks over and beyond London.
The City is important to HSBC, of course, but Green's bank employs 285,000 people in 76 countries. What happens in the UK is only one bit of what concerns him. Being based in a low-slung building in a different part of town would seem quaint and wrong.
Green barely mentions the remarkable setting when we meet. It must be part of the in- ternal discipline of HSBC to not let fripperies get in the way. This is a bank, after all, that grew up in the spectacular location of Hong Kong harbour. And you can't help thinking that among the sites that were available a few years ago, when the company concentrated 8,500 staff from 17 central London premises in one spot, it sought the same heady mix of light and water.
For all its external splendour, Green's office is small. His furniture is functional black leather, his desk compact. It's a workstation, not a play- station. There are some photos of his wife, Janian, two grown-up daughters and family and that's it: no distracting works of art, nothing that says 'I'm the big I am'.
Yet Green is the big I am. He's the new executive chairman of HSBC, a company that last year made profits of £12 billion. At the end of this month, he steps into the shoes of the legendary Sir John Bond. That will be a hard act to follow. In his eight years in charge, Bond drove Hongkong & Shanghai Banking Corporation relentlessly forward, making a string of acquisitions – most notably that of Household, the consumer finance group in America. He turned the company into a truly global concern, giving it the identity used in its marketing campaigns of HSBC – 'the world's local bank'.
To give another measure of Bond's achievement, HSBC is the only British brand in the top 50 world brands rated by Interbrand, the leading branding consultancy. In 2004, it was 33rd; last year, it was 29th. In China, HSBC is the highest-rated foreign brand of any kind.
Bond was a charismatic leader: high-profile, good with clients and juniors in equal measure, a charming, urbane schmoozer of the rich and powerful in Asia, the Middle East, Europe and the US, decisive and ruthless when necesssary.
He'd also been with HSBC 40-odd years, one of a band of career HSBC men who spent all their working lives at the 'Honkers and Shankers'. He was fond of referring to the HSBC culture – an intangible that stood for care and attention and civility, for not being flash, for always putting clients' needs first. Its history, traditions and methods were steeped in his veins.
It's a testament to the longevity of the Bond generation that Green is still regarded by some in the bank as a bit of a newcomer, despite having been there for nearly a quarter of a century. 'I'm a new boy because I didn't join straight from school or university – but I've been here 23 years, so I'm not exactly a new boy,' he says. But it also says something about Green's character. He's cerebral, intellectual, quietly spoken. His lean physique makes him seem austere. He's also a committed Christian; indeed, he's an ordained deacon who preaches on Sunday mornings and has written a book, Serving God? Serving Mammon? Christians and the Financial Market.
If society falls into two camps, abstainers and indulgers, he's with the former. Whereas some wealthy bankers conspicuously consume, Green is to be found hill-walking, listening to a favourite opera or reading a classic novel – pref- erably in the original language. He speaks French and German fluently and says that when he retires he'd like to learn Italian and Russian – Italian because it is a beautiful language, and Russian 'because I want to read Pushkin, and you can't really read poetry in translation.'
Yet Green is good company. He's amusing, with a dry wit, and mischievously challenging – he has a habit of throwing questions back at you and likes to provoke debate. There's a gleam in his eye if he senses a weak argument, and he delights in verbal sparring. He may not be the chap propping up the bar telling risqué jokes and tall stories, but that isn't the HSBC way. The place is infused with a strong work ethic; teamwork is the guiding principle and the cult of the personality is frowned upon.
Yes, Green is different from many bigshot bankers, but he has been on a succession path straight to the top for years, and he was nurtured by Bond, who prided himself on thinking things through and devising strategy. Green also comes across as fiercely competitive – there's no doubting his intense desire to win.
He hates talking about himself – the bank is more important than any individual – but, under pressure, some details are forthcoming. He was born in 1948, the son of a solicitor in Brighton. He went to nearby Lancing College as a border. Did he like sport? 'No, not really.' (Today, he plays golf, but not very well.)
What did he do? 'I don't know, I suppose I got through school, I just got through it,' he says, frustrated to be sidetracked by personal questions and baffled that anyone should be interested; he prefers to talk about the business.
He is, of course, modest. 'Getting through school' resulted in him winning a place at Oxford to study modern languages. No sooner did he arrive than he switched to philosophy, politics and economics – not because the course was easier but because it 'provided a terrific grounding for the modern world'.
After Oxford, he had a gap year before choosing to join the Civil Service. 'I'd always wanted to work overseas, so I joined the Ministry of Overseas Development.' He spent seven years at the ministry, two of them on a Harkness Fellowship to study at Massachusetts Institute of Tech- nology (for an MSc in political science).
Then he quit, for 'Masters of the Universe' consultants McKinsey. 'One of the best decisions I've made in my life was to go to McKinsey. It was an extraordinary firm that offered a variety of public- and commercial-sector work.'
For the first time, Green is animated. 'McKinsey is unique. It gives you experience of trying to solve significant business problems and of interacting with very senior management and boards. It teaches you skills in approaching business problems and in presentation and in working in teams.'
He says this with a mixture of awe, fondness and gratitude. He was based in McKinsey's banking practice, and after five years rose to one level below partner, as a senior engagement manager. A headhunter contacted him and said they were working for a 'dynamic, Far East financial institution' – was he interested? When I laugh and quip: 'That must have been Standard Chartered then', in reference to HSBC's much smaller Asian rival, he rejoinders: 'You're right, it must have been Standard Chartered!'
He's quick and needle-sharp. He's scoring a point: back then, Standard Chartered was probably a lot more go-ahead than its colonial cousin. HSBC was a very different company from the all-conquering multinational of today. In 1982, it had just 30,000 employees, mostly in Asia.
The job was in HSBC's business planning and strategy department, working for Bernard Asher, who went on to become executive director of the group and to head its investment banking arm. His contract was for two years. He'd mentally allocated four years to the bank before moving on, but like all the best-laid plans, it was subject to change: he never left.
Green's critics like to snipe that while nobody doubts his intelligence or his ability to come up with a way forward, he has never been a roll-your-sleeves-up banker. He's good on vision but weak on the day-to-day. With his character and CV – having joined straight from McKinsey and moving into a backroom, analytical role – it's easy to see how such a view has arisen.
But when I say that some maintain he lacks experience at the coalface, he retorts: 'For a start, I set up treasury for the bank – that was running a business, meeting clients, being responsible for a p&l account. What's that if it isn't "coalface"?'
The truth is that Green didn't start at the bottom of HSBC: he didn't do a stint behind the counter. Rather than work his way up the bank, you could say he worked his way through it. He went from corporate planning to treasury and joined the board in 1998.
In 2003 he beat the better-known Douglas Flint, the bank's long-time finance supremo, and Bill Dalton, its retail head, to the CEO's job. He succeeded Sir Keith Whitson, another popular figure in the HSBC firmament. It was a shock. But it's clear that what Bond saw in Green was somebody who could take a view of the bank as a whole, not just one department, who could fit the group into the context of a fast-moving and ferociously competitive environment, and was able to to plan and to think long-term.
He also plumped for someone who, for all his scholarly manner, could take tough decisions. Here, Green's relative lack of allegiance to a particular constituency within the bank helped. On joining the board, Green was put in charge of the investment banking side; when several of the staff missed their targets, his response was swift and unheard of: he didn't pay their bonuses.
In effect, being appointed CEO was a stepping-stone to the number one job of executive chairman. It's the top job, but he likes to think of a flatter structure. 'I must stress it's not just about one person,' he says. 'We believe in collegiality; we're a very collective management – that's not a disclaimer but a very important statement as to how HSBC works.'
One word that Green uses often is 'continuity'. The bank, he says, will evolve and change, but it will remain anchored to the 'same fundamental continuities'. Anyone looking for a major shift in approach will be disappointed. 'We've got a broad international platform, a range of services from personal customers to thousands of corporates and institutions.'
How big can HSBC get? He nods. 'It's a question we ask ourselves each time we think about an acquisition. We ask, does the "management stretch" become a bridge too far?' If the answer is yes, the deal is a non-starter. So far, he says, despite the bank's size, it remains 'entirely manageable. It's huge, but other companies, like IBM, employ bigger numbers. Now, ab initio, there must be a point where you hit a wall, where to get any bigger would be counter-productive.' He smiles. 'But financial services is a long way from being consolidated.'
He isn't interested in mere size. 'The culture of this bank is its most important asset. I have to ask myself whether an acquisition will help reinforce it or put it at risk.' He will not do anything to jeopardise that culture, he stresses. Culture, continuity and sustainability are Green's and HSBC's pillars - he refers to them constantly.
Where does he think the culture stems from? 'One thing that is vital to our culture is our learning and development centre,' he says, referring to the bank's residential management training facility in Hertfordshire. There, graduate recruits from around the world mix together and meet Green and his senior colleagues. 'I go every time. There will be 30 or 40 for dinner and I will take questions. The last one I went to, there were 40 – from 20 different nationalities. That's fantastically energising.'
Inside and outside the bank, some question what sort of executive chairman Green will be. Bond was both a thinker and a doer; Green is perceived as more the former than the latter. Some suggest he might become like a non- exec chairman, leaving the running of the bank to the new chief executive, Mike Geoghegan.
Certainly, there is confusion as to how the roles divide. 'In many ways, the terminology is not helpful,' he concedes. 'If it's a question of a part-time chairmanship versus a full-time chairmanship, then very clearly I will be full-time. In such a large company, we can have a division of labour where the chairman concerns himself with strategy, corporate governance and the chairing of the board. The CEO is responsible for running the company and delivering the strategy drawn up by the board.'
What's his preferred title? 'Chairman,' he says. But what about the Higgs Code, which frowns on CEOs stepping up to chairman? 'Higgs always allows for "comply – or explain". We can explain – our culture is to have a continued commitment to the business. It's in the best interests of HSBC shareholders to maintain a broad continuity of the management group.'
In other words, what is right for other large companies isn't right for HSBC. There is, it goes without saying, a certain arrogance here. Don't other businesses subscribe to Higgs, and don't they also set great store by 'continuity'?
Green is unflinching: continuity is what HSBC does; it's what its shareholders want; it's what has got the bank this far. 'If you lose the continuity, it weakens the fabric of the organisation and the sustainability of the business.'
But what about the investment banking operation? It seems to go against the HSBC grain, involving the hiring of outsiders on large salaries and the payment of very large bonuses. First, he expresses irritation that I, and others, don't express the same degree of interest in other parts of the group. 'We've had two significant investment programmes in the last few years. One has got 90% of the attention while the other – personal financial services in Asia – has been ignored. Yet we've gone from being nowhere to being the leading credit-card player in Asia.' He wishes that everyone 'would begin paying balanced attention to the different parts of HSBC'.
If HSBC was to be a leading global player, it needed an investment banking arm to service corporate clients. If it didn't, the risk of losing them to rivals was obvious. Plus, this area has the potential to be hugely profitable.
Investment banking and HSBC weren't a new combination – it had an investment banking presence previously. But this was Bond and Green, his CEO, and the group resolving to take it seriously. They decided to grow their own, not to go into the market and purchase an off-the-shelf investment bank. It was that 'continuity' thing, but also, as Green says, HSBC didn't want to pay through the nose for a bank and then have to persuade its best people not to leave. 'You have to buy it once and then buy it twice to retain your assets. That's humungous.'
The board recruited John Studzinski from Morgan Stanley and put him together with Stuart Gulliver from HSBC to build a division capable of challenging the biggest players.
The move was not without its downside. 'Studs' Studzinski was a heavy-hitter, an American not grounded in the HSBC way. He and Gulliver hired individuals from other houses, offering them sums out of kilter with other parts of HSBC. When at first the mandates didn't land, rivals were quick to gloat that the whole project was doomed to fail.
HSBC has now started to pick up briefs, but the juries are still out, both internally (where the unit arouses much jealousy) and externally (where competitors are fearful of HSBC's muscle and would like to see it perish). One view is that Green, no slouch in cutting investment bank bonuses in the past, may not be so tied to the Studs-Gulliver show.
His denial is firm. 'We've spent a lot of time on the hiring process. They've each spent hundreds of man-hours building up the division. They have a very clear perspective of what they're doing. We're a collegiate, focused business and, it's true, CIBM [the corporate investment banking and markets division] has a different compensation approach. But that approach isn't unique to investment banking and to other areas of banking, such as private client banking. People accept that the world of investment banking and markets is different. There are very different pay structures geographically within the bank – between the US, say, and the emerging markets.'
While some carp that progress has been slow, Green says he's satisfied. 'We recognise Rome wasn't built in a day. We're gaining traction in the corporate finance and advisory area – it's work in progress. We've got the bulk of the investment behind us and now the rate of cost growth can come down to the levels of a sustainable business.
'Everything within HSBC lives and dies by the p&l,' he adds, 'not just investment banking. And that's accepted.' Suddenly, Green is less the don from All Souls and more the hard-edged executive. The mettle is there. You can see why Bond – and the larger investors who were consulted – chose him.
How, though, does he square what he does with his deeply-held religion convictions? He pointedly stares at his watch. This is about him, which he hates and believes is anathema to the corporation he runs. 'This will be a 30-second answer. First of all, I'm not concerned whatever about people's different faiths. There is, though, a great deal of commonality that runs through everyone who works here – which is that they susbscribe to the same professional standards and have the same integrity and morality and the same desire to meet customers' needs.'
He glances at his watch again – he really doesn't like discussing anything that smacks of self-aggrandisement. He rattles through his rationale: only by behaving properly do businesses acquire sustainability; the role of the banks is to improve people's lives, not to hinder them. And he points out: 'Society can't run without well-functioning banks as the core of the economic system.'
Yes, but there must be occasions when he questions what is he doing? 'I look in the mirror and, if I'm honest, I'm not always perfect. But that's true, if they're also honest, of anybody in any walk of human life.'
Again, he looks at his watch. The 30 seconds is up. Far below, the Thames snakes away into the distance. His really is a view to die for.
Four tough challenges facing Green
1 To ensure increasing size does not diminish HSBC's distinctive corporate ethos
2 To develop HSBC as a force in investment banking
3 To maintain his bank's lead in China
4 To establish as firm a hold across the group as Sir John Bond enjoyed in the past
Green in a minute
1948 Born 7 November. Educated Lancing College; Exeter College, Oxford; Massachusetts Institute of Technology
1971 Civil servant in the Overseas Development Agency
1977 Joins McKinsey & Co, advising banking clients
1982 Recruited by HSBC
1998 Joins HSBC board
2003 Made chief executive
2006 Appointed executive chairman