HSBC director Rona Fairhead clings on for another year despite calls to quit over incompetence allegations


HSBC Holdings plc (LON:HSBA) director Rona Fairhead CBE has stated that she intends to resign from her position on the board, however, in a letter to shareholders she stated that she will remain for one further year before formally leaving.

In March this year Ms. Fairhead appeared before the Public Accounts Committee of the House of Commons as a non-executive director of the Swiss subsidiary of HSBC. The chair of the committee, Margaret Hodge MP, stated that in the light of her performance as an HSBC director, she was no longer fit to continue in her role heading the BBC Trust.

Ms. Fairhead announced her departure from her position as non-executive Director of HSBC in a letter to shareholders dated March 20. This move represents a change in position for the bank, which said in its annual report that Ms Fairhead would again stand for re-election.

According to a report in the Daily Mail, HSBC insisted yesterday that “no decision has been taken at this time.” Labour MP Mrs Hodge had extended her opinion to Ms. Fairhead: ‘You should think about resigning. If not, the Government should sack you.’

Mrs Fairhead chaired HSBC’s audit committee and then its risk committee while its Swiss clients are said to have dodged tax. The bank was subsequently fined £1.2 billion for breaching American money-laundering laws.

Last year, Mrs Fairhead earned more than £500,000 last year as chairwoman of HSBC’s American business. Her decision marks a change from February, when HSBC’s annual report said that despite having been on the board since 2004, Mrs Fairhead would again stand for re-election.

Ms. Fairhead’s early business career was spent at Bain & Company and Morgan Stanley in the 1980s before she moved to British Aerospace as an independent consultant in 1991. Later in 1991 she moved to Short Brothers shortly after it was bought by Bombardier Inc. She rose to become vice-president for corporate strategy and public affairs in 1994 and then vice-president, UK aerospace services in 1995.

In 1996, she became director of planning and acquisitions for Imperial Chemical Industries before joining the company’s executive management team as executive vice-president for planning and communications in 1997, and continuing as executive vice-president for strategy and control from 1998 to 2001. From 2002 to 2006, Ms. Fairhead served as chief financial officer for Pearson PLC.

Ms. Fairhead moved to the Financial Times Group (a subsidiary of Pearson) in 2006 as chief executive. In this position, she oversaw the sale of several of the group’s other titles during her tenure.

She also serves as a non-executive director on the boards of several large corporations, one of which is HSBC whose board she has been on since 2004, as well as PepsiCo. She also holds a non-executive position as a “business ambassador” for UK Trade & Investment.

Ms. Fairhead stepped down from her Financial Times role in 2013 after being overlooked for the position of Chair of the Pearson Group when the post was vacated by the previous incumbent, Marjorie Scardino.

At the time of her departure from the Financial Times, Ms. Fairhead’s leaving package was estimated to be worth over £1 million in addition to stock options estimated at over £3 million, which was a contributing factor to a shareholder revolt at Pearson’s annual general meeting in April 2014.

In August 2014 Britain’s Culture Secretary Sajid Javid recommended Ms. Fairhead as the preferred candidate for the chairmanship of the BBC Trust, following the departure of Chris Patten, who resigned on health grounds in May. Sources such as The Guardian and The Daily Telegraph reported that her appointment had caused surprise at the BBC, which had expected someone with a higher public profile to get the job.

 

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HSBC director Rona Fairhead clings on for another year despite calls to quit over incompetence allegations

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