By Steve Slater

LONDON, Sept 8 (Reuters) - For a bank that prides itself onsmooth successions, HSBC is suddenly scrambling to pick its nextchairman.

The frontrunners to succeed Stephen Green, set to become aBritish government minister in January, are said to be formerGoldman Sachs banker and HSBC non-executive director JohnThornton, 56, and current chief executive Michael Geoghegan, 56.

Both have a wealth of experience of China, Asia morebroadly, and an inside track on the complex and far-reachingfinancial services giant.

HSBC's choice is complicated by it having to decide wherethe chairman will be based, past trouble with investors when itignored best corporate governance and the sheer complexity ofmanaging the world's third biggest bank.

The lender said its reach across 86 countries and diverseoperations explained why it needed a full-time chairman withinternational banking experience.

Green, who will become Britain's trade and investmentminister in January, announced his exit on Tuesday, earlier thanexpected and without a successor being named. The bank said ithad started a search for a replacement.

Thornton spent 23 years at Goldman Sachs including spells aspresident and co-chief operating officer and was head of itsLondon operations and chairman of the Asia business. He has beena non-executive director at HSBC since 2008.

Irish bookmaker Paddy Power makes Thornton the 5/4favourite, with Geoghegan at 15/8.

Other candidates linked with the role include SimonRobertson, another non-executive; Vincent Cheng, chairman ofHSBC Bank (China); Douglas Flint, finance director; MervynDavies, former boss of rival Standard Chartered; and AdairTurner, head of Britain's financial watchdog.

TOO SOON FOR GEOGHEGAN

HSBC has a history of promoting from within.

If Geoghegan was to step up -- and it is not clear he wantsthe position -- the favourite to succeed him as CEO is StuartGulliver, boss of the fast-growing investment bank arm for sevenyears and now also chairman for Europe, Middle East and Africa.

"The promotion of Michael Geoghegan and Stuart Gulliver tothe respective roles of chairman and CEO seems to be 2-3 yearstoo early, for both the individuals and for the execution of therenewed Asia focus," Oriel Securities analyst Mike Trippittsaid.

The role has also shifted in recent years -- the chairman isnow more ambassadorial and less involved in day-to-dayoperations than in the past when chairmen such as William Purvesand John Bond clearly ran the show.

As Geoghegan said in a statement on Tuesday: "For HSBC it isbusiness as usual; I continue to run the company."

When Green, then CEO, was promoted five years ago, itangered some investors.

PIRC, an advisory service for investors on corporategovernance issues, said on Wednesday it is "very difficult for aformer CEO to be objective about strategic company decisionswhen they have previously been responsible for that strategy."

PIRC said it listened to exceptions but generally did notsupport such a move, and it opposed Green's election as chairmanwhen it was voted on in May 2006.

Before that vote Brian Moffat, then head of the bank'snomination committee, wrote to shareholders to explain why thebank had not complied with best corporate practice, citingHSBC's size, geographical spread and complexity.

"HSBC is a remarkable organisation with a distinctivecharacter and culture. The business is managed throughinternational teamwork and HSBC believes this is best achievedby management continuity and amongst colleagues who have similarvalues," Moffat said.

(Editing by Dan Lalor and David Cowell)