Chief executive is a precarious role at the best of times, but there are few wobblier platforms than that of interim chief executive, obliged to manage for the short term and deprived of the powers of permanent office.
All of which makes it hard to explain, at first glance, the sweeping strategic decisions taken by Noel Quinn, interim boss of HSBC since last August, when his predecessor John Flint stepped down abruptly.
Last week Quinn launched what he called one of the "deepest restructurings" in the bank's long history, cutting 35,000 jobs over the next three years. Investors legitimately wonder why Mark Tucker, HSBC chairman, and the board have not simply confirmed the down-to-earth lifer in the top job, so he can own the consequences of his radical actions.
Conveniently, UK banking threw up a counterpoint to HSBC on the day after Quinn outlined his plan, when Dan Frumkin was made permanent boss of ailing Metro Bank. Frumkin, who joined as chief transformation officer a month after Quinn took the provisional role at HSBC, will lay out his strategy this week.
Bad stuff tends to happen during an interregnum. Quinn, a fan of the gangster television series Peaky Blinders, should know a bit about the internecine strife that can ensue as feuding rivals try to assert themselves.
If he prefers a more culturally appropriate example, he does not have to dig very deep into The Hongkong and Shanghai Banking Corporation library to learn about the Chu-Han Contention, a bloody four-year civil war that broke out in China after the Qin dynasty collapsed in 206BC. The dominant Chu warlord of the time had the bright idea of splitting the empire into 18 kingdoms. That restructuring ended with victory for the rival Han and the interim Chu chief's beheading.
Less bloody, but no less damaging, is the impact on the share price of companies that allow temporary rulers to prevail for long. A 2010 study found that US companies' market capitalisation and operational performance deteriorated during an interregnum.
Other European companies should take notice. Clotilde Delbos has been caretaker chief executive at Renault since October, and will be there until July when Luca de Meo takes the role, as the carmaker reshuffles senior managers in the wake of Carlos Ghosn's fall.
Thyssenkrupp, the German industrial group, has had a spate of interim or shortlived chief executives and chairs since activist investor pressure unseated the incumbents in summer 2018. The current interim chief, Martina Merz, stepped away from chairing the supervisory board to take on executive powers after Guido Kerkhoff was ousted last September.
Shares in Thyssen, Renault and HSBC have all underperformed their respective benchmark indices since the companies appointed interim chiefs. That is unsurprising in one sense.
The circumstances in which a board seeks a temporary leadership fix are often turbulent.
Caretaker managers normally lack authority. They tend to live up to their title by managing tactically, changing lightbulbs rather than rewiring the whole building.
Another academic study of stand-in chief executives, published in 2014, asked the obvious question: why would directors choose a halfway solution when experience suggests it often damages the results and the share price? One answer, according to the research, is that after a sudden transition, successors are not always ripe for high office.
Having ditched one chief executive, boards are also nervous about instantly plumping for a permanent replacement. It would be hard for HSBC to recover from a second botched appointment.
The close involvement of the chair can help make an interregnum easier. When chairs substituted temporarily for the chief executive, the harm to the company's performance was reduced, according to that 2010 study. Tucker may not have stepped in to the executive gap himself, but he has a pedigree as a strong-minded, hands-on CEO of insurers AIA and Prudential. HSBC is also genetically predisposed to pander to the chair.
Tucker is the first non-executive in that position after a long line of executive chairmen.
Even so, Tucker should not extend the interim awkwardness much longer. The deeper the Tucker-Quinn strategy is embedded, the less likely he, or any outsider, will want the job. A leading external candidate Jean Pierre Mustier of UniCredit has already ruled himself out of the job.
The 2010 study also shows that when a provisional boss hangs on for more than four quarters, the share price deteriorates further.
That said, the benefits of certainty and stability, under Quinn or a carefully selected alternative, could be substantial. Once established under a permanent ruler, the Han dynasty lasted four centuries.
Written by: Andrew Hill
© Financial Times