Anthony Hilton: Is Tucker the charmer HSBC are looking for?

The management succession at HSBC used to be a byword for continuity. Chairman and chief executive were combined in one job; candidates came up through the ranks to what was a position of serious power.

Michael Sandberg, the last of the leaders while the bank was headquartered in Hong Kong, gave way seamlessly to Willie Purves. A few years later there was not a ripple when he handed on to John Bond.

It was only when the bank modernised its governance and separated the roles of chairman and chief executive that the ride began to get bumpy.

In particular the process that led to the emergence of current chairman Douglas Flint was preceded by a serious spat in the boardroom.

There has been no repetition of that this time. Instead the board has reduced observers to open-mouthed amazement by appointing Mark Tucker to succeed Flint.

He is the Hong Kong-based head of AIA, which is an Asian insurance and fund sales organisation spun out of the American giant AIG after the financial crash.

Before that Tucker ran the Prudential in London, having made his name by heading with great success the Prudential’s Asian business, where AIA was his major competitor.

He has spent more time as a professional footballer (with Wolves) than as a banker though he did put in a two-year stint as finance director of HBOS in those frothy few years before the financial crisis.

It was not a happy time, however, and his abrupt decision to return to the Pru caused more than a bit of bad mouthing.

From his perspective though, it meant he avoided being around and therefore tainted when the bank had to be rescued by Lloyds.

Indeed he is one of the few to feature without embarrassment in whistleblower Paul Moore’s toe-curling exposé of how the HBOS organisation was run in those days.

Tucker has spent much of his career in Asia and while this is not where HSBC faces its major challenges, his knowledge of, and contacts in, the region clearly are a major plus.

If this, and proven success as a hard-driving executive, were all that is required to be a good chairman then Mark Tucker would tick all the boxes.

But these days the job of chairman is about much more than that. It is about compliance; it is about being on good terms with regulators and politicians; it is about creating and embedding a culture which will minimise the chances of scandals like Swiss tax avoidance, Mexican money laundering or rigging benchmarks like Libor.

It is a job for a diplomat where charm matters more than business acumen.

That is what makes this appointment so interesting. When Sir David Clementi was chairman of the Prudential, Tucker as chief executive was rumoured to have walked out of a board meeting saying he had a better use of his time.

Such stories are perhaps just that — stories — but they are instructive because many who know him believe they could be true. Mark Tucker has huge talents, but his less obvious skills in diplomacy, regulation and charm will be how he is judged now.

In stark contrast to his predecessor George Osborne, Chancellor Philip Hammond got through an entire Budget speech last week without once mentioning housing.

No new gimmicks to encourage buyers, no more disguised bungs for housebuilders, no promises to tweak the planning system.

This came as a relief to the housing associations which between them build between a quarter and a third of the new homes in Britain, including many for rent. Ever since they were targeted by Osborne for “building homes for Labour voters” Budget day had tended to bring nasty surprises.

Osborne also slashed government funding, so in recent years associations have become increasingly reliant on the capital markets to provide the long-term money they need to build the houses.

Since 2012 almost £15 billion of housing association bonds and debt has have been funded by organisations like Pension Insurance Corporation, M&G and Legal & General.

But this funding is still in its early days and relatively selective. Only a few asset managers account for the bulk of the lending and only a few housing associations account for the bulk of the borrowing. More is needed on both sides; the circle of lenders and borrowers needs to widen.

However, it will come at a cost. If the sector wants more money from fund managers it is going to have to grow up.

The Investment Association, the trade body of the asset management industry, believes housing associations need significantly to improve their standards of governance and disclosure.

In a paper published this month, the IA spells out what it wants. Housing associations have to take investor relations seriously, they have to report more fully and in a more timely manner; they have regularly to publish key performance indicators including potentially embarrassing numbers on rental arrears and vacancies.

Board performance needs to improve with data on how directors are selected, how long they serve, what board committees they sit on and how effective these are. They want more on board effectiveness and to know who is responsible for what.

This should not faze the largest housing associations, some of which are big enough to be in the FTSE 100 index. But this is a sector with a very long tail. This degree of governance and transparency will undoubtedly come as a shock to many of the smaller organisations.

How they respond will have a significant bearing on UK housebuilding in the future.