This gem required a subscription to the New York Times to read it: “HSBC also said that writing off its investment in HSBC Finance would do lasting damage to its reputation.” I am stunned by that statement. HSBC should cultivate, build, and promote employees of HSBC Finance before anything else. HSBC owes a debt to those employees, and should elevate their status as bankers trained to succeed anywhere in the world. HSBC owes HSBC Finance employees a debt of honor, not just at upper levels, but at all levels. An account executive in Iowa, or any state for that matter, should be trained to succeed as a banker in London.
Point: Strong companies usually give employees stability in exchange for loyalty.
Point: Throughout America employees wanted some control over stability, and thus stock plans, employee stock options, and employee pension plans satisfied that need.
Point: At Household International William Aldinger told employees to buy more stock, that the company was sound, and was not a predatory lender. Within days the stock crashed, charges were filed, and Aldinger knew it was coming.
Point: When HSBC purchased Household International many employees thought HSBC stock was more secure, more stable, and was a rescue or sorts, which in fact it was, had Household International continued in to bankruptcy.
Point: We have a debt of honor in business, to our customers, and that debt is to perform as professionals, interfacing with our peers, subordinates, and the general public. Where was that debt of honor at Household International?
Point: It is really all about space and time. The amount of space in viable respected financial circles, and the amount of time it takes to establish a fair, legal, business-like approach at the top of a respected field. Respect for employees is paramount to making that happen. Thou shall not flounder, browbeat, intimidate, or let employees do without, and most important of all, never sacrifice the debt of honor.
Point: In Vietnam people my age fought in a war where the other side made the rules. It did not go too well. In subprime as in credit cards, the consumer fights the same kind of war.
Point: Who protects the people now? Traditionally it must be the United States Government if, in fact, business will not do it themselves. Honor dictates that individuals protect others as they would their own family, including their elders. Instead, a full 32 percent of subprime victims were over age 55.
Point: At Household International there existed a fine mix of things said and unsaid. Unsaid at the closing table, but said in the outer office in front of witnesses, customers were told that loans could not be paid off in the given time frame at the quoted monthly payment. Each individual must form their own opinion as to what is right or wrong, and whether the practice should be allowed to continue.
Point: We all know our own conscience very well. Images that visit us at night when no one else is awake, and spoken words that continue to play in our ears long after the fact, are but two of the things a debt of honor prevents, and protection of others allows us to sleep at night. Yes, HSBC could have changed Household, made a success of all employees, while incorporating employees in to a world-class bank. It should be done before saying anything about writing off the bank’s investment in Household International.
Here is more about ethics in business