Laura Cha, formerly with the Hong Kong Securities and Futures Commission and the first non-mainland Chinese to work with China’s securities regulator, has been appointed an independent non-executive director to the board of HSBC Holdings. She will take up the new position from March 1.
The appointment was announced by the bank on Friday. In the same statement, the London-headquartered lender also said that Vincent Cheng, who was chairman of HSBC’s Asia-Pacific business, The Hongkong and Shanghai Banking Corporation, until February 2010, will retire from the top board at the annual general meeting on May 28. Cheng, who is currently an executive director on the board, will also give up his remaining executive positions as chairman of HSBC Bank (China) and of HSBC Taiwan, but will keep an association with the bank as an adviser to group chief executive Stuart Gulliver on regional matters.
Cha’s appointment will be for an initial three-year term, subject to her re-election by shareholders at the May AGM. She is no newcomer to HSBC, however, having served on the board of The Hong Kong and Shanghai Banking Corp, locally known as Hongkong Bank, since 2004. She is currently a non-executive deputy chairman of that board and separately also provides corporate relations advisory services to the same board.
According to an insider at the bank, her additional appointment to HSBC’s main board globally recognises both her contribution to the Asian business and the importance of Asia and China for the group as a whole. At 61, Cha’s credentials are also impeccable and the HSBC statement referred to her as “a Greater China regulation and policy expert”.
In addition to being a director on several high-profile corporate boards, she is also a Hong Kong delegate to the 11th National People’s Congress of China; a non-official member of Hong Kong’s executive council – which effectively makes her a minister without portfolio in the local government; and a vice-chairman of the International Advisory Council of the China Securities Regulatory Commission (CSRC). From 2001 to 2004, she was a vice-chairman of the CSRC, an appointment that made her the first person from outside mainland China to serve in the central government of the People’s Republic of China and required her to give up her US passport. She was awarded a Silver Bauhinia Star by the Hong Kong government in 2001 and a Gold Bauhinia Star in 2009 for her public service.
“[Cha] brings a rare breadth and depth of policymaking and regulatory experience, spanning two of HSBC’s most strategically important markets – Hong Kong and mainland China. We welcome her to the main board, where I have no doubt that her knowledge and expertise will further strengthen HSBC’s position as Greater China’s leading international bank,” HSBC’s group chairman Douglas Flint was quoted as saying in the announcement.
While Cha is not an employee of the bank, she is well-paid for her services to the group. Her new role on the global board will earn her a director’s fee of £65,000 ($105,000) per year, which is in addition to the HK$450,000 ($57,770) per year that she receives as deputy chairman of Hongkong Bank and the $650,000 per year that she collects for her advisory role to the Hongkong Bank board. In total, a handsome payment of more than $800,000 per year.
Prior to joining the CSRC in 2001, Cha worked with Hong Kong’s securities regulator, the Securities and Futures Commission, for 10 years. During her time with the SFC she oversaw the de-mutualisation of the Hong Kong stock and futures exchanges and she was also instrumental in drawing up a framework for the listing of Chinese companies in Hong Kong in the 1990s. At the time she left she was deputy chairman.
She has also worked in the US, where she is a member of the State Bar of California. Among her many current roles, she is a non-executive director of Hong Kong Exchanges and Clearing, the operator of the Hong Kong stock exchange; China Telecom Corp; and India’s Tata Consultancy Services. She also sits on the ICAC advisory committee on corruption in Hong Kong and on the advisory board of the Yale School of Management, and is a senior international advisor for Foundation Asset Management AG.
Meanwhile, Vincent Cheng, who is 62, has worked with the HSBC group for 33 years. In 2005, he became the first ever Chinese national to hold the chairman role at Hongkong Bank – a job he took on when David Eldon retired. Before that he was vice-chairman and CEO of Hang Seng Bank, which is majority owned by HSBC, for seven years. In 2008, he was appointed a member of the National Committee of the 11th Chinese People’s Political Consultative Conference (CPPCC).
“[Cheng] has made a huge contribution to the development of the strong and broad-based Asia platform we have today, in particular in laying the unrivalled foundations we have in China for the future. His knowledge of the region and representation of it at the board have been a real asset to me and my fellow directors, and I am glad that we will continue to benefit from his valuable advice in Asia, said Flint.
The changes to HSBC Holdings’ board come after a top leadership shake-up, which was announced in September last year and took effect in December and January. The shake-up was sparked by the nomination of former HSBC chairman Stephen Green to a UK government post and became more dramatic than anticipated after CEO Michael Geoghegan announced his resignation, supposedly after being passed over for the chairman’s job (although that was denied by HSBC). Either way, this opened up for a promotion of Asia veteran Stuart Gulliver to group CEO from January 1, while Flint took over as chairman in December after serving as the group’s chief financial officer since 1995.